00:01
Hello students, let's do this question.
00:02
A newspaper boy purchases paper at 10 cents and sells them at 17 cents per paper.
00:15
That is, he earns $7 of profit per paper.
00:20
So here he is not allowed to return the unsolved papers.
00:27
He, if his daily demand is a binomial random variable, with n is equal to 9 and p is equal to 0 .25.
00:44
So we have to find how many papers should he purchase so as to maximize his expected profit.
00:51
So here x follows binomial distribution with n is equal to 9 and probability p is equal to 0 .25.
01:01
So here maximum profit is equals to z.
01:04
Which equals to 9 into 10 because he sold her paper, his paper at 10 cents, that is 9 into 10 plus 17 into x, which equals to 90 plus 17 x.
01:26
So here we know that the expected profit is as for expected profit is equal to expected profit is equal to 10.
01:36
Into summation i from 1 to 9 c i 0 .25 raised to i into q n minus i that is 0 .75 raise to n minus i so here per day we have to calculate per day papers that is 10 into i is equals to 1 then we get the probability that 0 .2 to 5 that is 10 .2 .252, which equals to 2 .252...