George And Sandra S Croissant Business 2838720

Question 2. George and Sandra’s croissant business.
For an hour in the morning before work, George sells croissants at the local commuter rail station in a space rented at $25 for the hour.
The daily demand for croissants is uncertain. It is either 100 croissants (prob. 0.8) or 160 croissants (prob. 0.2).
George buys the croissants in the morning for $0.20 each before he knows the demand. He sells them for $0.75 each. Unsold croissants are trashed.
How many croissants should George buy each morning and what is his expected daily profit? Use the K rule:
Continuing with the above: Sandra, another entrepreneurial young woman, sells croissants for an hour at the same rail station although in the evening.
Sandra rents her evening vending space for $10, and gets her croissants in the morning from the same supply bakery that George does (the bakery is open only briefly in the morning) at the same cost of $0.20 each.
Evening demand is weaker than the morning’s and is: either 60 croissants with (prob. 0.8) or 100 croissants (prob. 0.2).
Since the croissants are not so fresh by the time she gets to sell them, Sandra charges a price of only $0.50 a croissant. Unsold croissants are trashed.
How many croissants should Sandra buy each morning and what is her expected daily profit? Use the K rule:
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Question 2. George and Sandra’s croissant business. For an hour in the morning before work, George sells croissants at the local commuter rail station in a space rented at $25 for the hour. The daily demand for croissants is uncertain. It is either 100 croissants (prob. 0.8) or 160 croissants (prob. 0.2). George buys the croissants in the morning for $0.20 each before he knows the demand. He sells them for $0.75 each. Unsold croissants are trashed. How many croissants should George buy each morning and what is his expected daily profit? Use the K rule: Continuing with the above: Sandra, another entrepreneurial young woman, sells croissants for an hour at the same rail station although in the evening. Sandra rents her evening vending space for $10, and gets her croissants in the morning from the same supply bakery that George does (the bakery is open only briefly in the morning) at the same cost of $0.20 each. Evening demand is weaker than the morning’s and is: either 60 croissants with (prob. 0.8) or 100 croissants (prob. 0.2). Since the croissants are not so fresh by the time she gets to sell them, Sandra charges a price of only $0.50 a croissant. Unsold croissants are trashed. How many croissants should Sandra buy each morning and what is her expected daily profit? Use the K rule:

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Prof. Angela

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