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Q124Section III (Statistics)124 of 190

A newsvendor problem with an unstated order quantity

A newspaper vendor buys papers for Rs. 3 each and sells them for Rs. 5 each. The unsold papers have no value. The daily demand for the paper has the given probability distribution (200: 0.2, 250: 0.3, 300: 0.3, 350: 0.1, 400: 0.1). If each day's demand is independent of the other days, the average profit per day is:

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