A local hardware store stocks specialty tile from American Olean. The tile sells

Question

A local hardware store stocks specialty tile from American Olean. The tile sells for $12 per square foot. The monthly demand for tile (in terms of square feet) can be expressed by the following probability mass function. The store manager buys the tile for $9.00 per square foot. If he places an order at the beginning of the month for 30 units. Format for answers below should be accurate to 2 decimal places. a. how much tile would he expect to sell? ____ b. How much profit would he expected to make? _____ c. How much tile would he cxpect to have left at the end of the month? ____

Explanation / Answer

a) From the given data

The number of tiles he expect to sell is 20.3

b) Profit = selling price - cost price (buying price) = 12-9 = $ 3 per square feet

On 20.3 tiles, the expected profit is = 20.3*3 = $60.9

c)

If he purchase 30 tiles at the beginning of the month then the number of tile would he expect to have left at the end of the month is 30-20.3 = 9.7 tiles

x f(x) xf(x) 10 0.12 1.2 15 0.2 3 20 0.33 6.6 25 0.25 6.25 30 0.05 1.5 35 0.05 1.75 Total: 20.3

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