Question

In: Statistics and Probability

A product, sold seasonably, yields a net profit of b dollars for each unit sold and...

  1. A product, sold seasonably, yields a net profit of b dollars for each unit sold and a net loss of l dollars for each unit left unsold when the season ends. The number of units of the product that are ordered at a specific department store during any season is a random variable having probability mass function p(i), i ≥ 0. If s is the total number of units stocked, find the expected profit for this product as a function of b, l, s, and p().

Solutions

Expert Solution

Correction: the complement of (s+1,) is U- [0,s], where U is the universal set.

Therefore the Expected profit for this product is E[P(s)] = sb+(b+l)i=0(i-s)p(i), where the limits of the summation are from i=0 to i=s.

orchestra answered 1 year ago
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