Problems

1. A GMC dealer believes that demand for 2005 Envoys will be normally distributed with a mean of 200 and standard deviation of 30. His cost of receiving an Envoy is $25,000, and he sells an Envoy for $40,000. Half of all the Envoys not sold at full price can be sold for $30,000. He is considering ordering 200, 220, 240, 260, 280, or 300 Envoys. How many should he order?

2. A small supermarket is trying to determine how many copies of People magazine they should order each week. They believe their demand for People is governed by the following discrete random variable:

   Open table as spreadsheet

   Demand	Probability
   15	0.10
   20	0.20
   25	0.30
   30	0.25
   35	0.15

   The supermarket pays $1.00 for each copy of People and sells it for $1.95. Each unsold copy can be returned for $0.50. How many copies of People should the store order?