In the Walton Bookstore example with a discretedemand distribution, explain why an order quantityother than one of the possible demands cannot maximizethe expected profit. (Hint: Consider an orderof 190 calendars, for example. If this maximizesexpected profit, then it must yield a higher expectedprofit than an order of 150 or 100. But then an orderof 200 calendars must also yield a larger expectedprofit than 190 calendars. Why?)

In the Walton Bookstore example with a discretedemand distribution, explain why an order quantityother than one of the possible demands cannot maximizethe expected profit. (Hint: Consider an orderof 190 calendars, for example. If this maximizesexpected profit, then it must yield a higher expectedprofit than an order of 150 or 100. But then an orderof 200 calendars must also yield a larger expectedprofit than 190 calendars. Why?)

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter10: Introduction To Simulation Modeling

Section10.4: Simulation With Built-in Excel Tools

Problem 15P

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