Henry has a newspaper stand where he sells papers for $0.50 each. The papers cost him $0.30 each, giving him a 20-cent profit on each one he sells
From past experience, Henry knows that
20% of the time he sells 100 papers
20% of the time he sells 150 papers
30% of the time he sells 200 papers
30% of the time he sells 250 papers
Assuming that Henry believes the cost of a lost sale is 10 cents and any unsold papers cost him $0.30, simulate Henry's profit outlook over 5 days if he orders 175 papers for each of the 5 days. Use the following random numbers: 52, 06, 50, 88, 53.
DAY RN DEMAND UNSOLD LOST PROFIT
1 52 200 0 25 32.50
2 06 100 75 0 -2.50
3 50 200 0 25 32.50
4 88 250 0 75 27.50
5 53 200 0 25 32.50
Average profit = 24.50
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