A news vendor sells newspapers and tries to maximize profits. The number of papers sold each day is a random variable. However,
analysis of the past month's data shows the distribution of daily demand in Table 16. A paper costs the vendor 20C. The vendor sells the paper for 30C. Any unsold papers are returned to the publisher for a credit of IOC. Any unsatisfied demand is estimated to cost IOC in goodwill and lost profit. If the policy is to order a quantity equal to the preceding day's demand, determine the average daily profit of the news vendor by simulating this system. Assume that the demand for day 0 is equal to 32. Demand per day Probability30 .0531 .1532 .2233 .3834 .1435 .06
In order to find the answer, we will have to add the initial costs of the items together, then we will calculate using the formula for percentages to find the tax rate.
<u>Calculate the percentage: </u>
<u>Add the sales tax:</u>
Which means the two items along with an 8.25% sales tax costs "$169.96 dollars."