The newsboy model Example 5.1-Mac wishes to determine the number of copies of the Computer Journal he should purchased each Sunday.The demand during any week is a random variable that is approximately normally distributed,with mean 11.73 and standard deviation 4.74. Each copy is purchased for 25 cents and sold for 75 cents,and he is paid for 10 cents for each unsold copy by his supplier. Discussion: One obvious solution is to buy enough copies to meet the demand,which is 12 copies. Wrong:If he purchase a copy that does not sell,his out-of- pocket expense is only 25-10=15 cents.However,if he is unable to meet the demand of a customer,he loses 75-25=50cents Suggestion:He should buy more than the mean.How many?The newsboy model Example 5.1-Mac wishes to determine the number of copies of the Computer Journal he should purchased each Sunday. The demand during any week is a random variable that is approximately normally distributed, with mean 11.73 and standard deviation 4.74. Each copy is purchased for 25 cents and sold for 75 cents, and he is paid for 10 cents for each unsold copy by his supplier. Discussion: • One obvious solution is to buy enough copies to meet the demand, which is 12 copies. • Wrong: If he purchase a copy that does not sell, his out-of￾pocket expense is only 25-10=15 cents. However, if he is unable to meet the demand of a customer, he loses 75-25=50cents. • Suggestion: He should buy more than the mean. How many?