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In: Statistics and Probability

:    A concert promoter needs to decide how many concert T- shirt to order supplied with...

:    A concert promoter needs to decide how many concert T- shirt to order supplied with          its logo name on the front side of T-shirt. The profit on each one sold at the concert is 50 L.E. and any unsold T-shirt and returned to the supplied company will cause a loss of 30 L.E for the promoter. Demand is uncertain but is estimated to be between 200 to 1000 T-shirt. The probabilities of different demand levels are as follows:

Demand Level             200             400            600           800       

       Probability              0.2               0.3               0.4           0.1

How many T-shirt should the promoter order to get the higher profit and the least loss?

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Expert Solution

Solution: Here concept of expected profit is used.

orchestra answered 1 year ago
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