University of Florida football programs are printed 1 week prior to each home ga

Question

University of Florida football programs are printed 1 week prior to each home game. Attendance averages 75,000 screaming and loyal Gators fans, of whom two-thirds usually buy the program, following a normal distribution, for $5 each. Unsold programs are sent to a recycling center that pays only 10 cents per program. The standard deviation is 10,000 programs, and the cost to print each program is $1. Refer to the standard normal table forz-values. a) What is the cost of underestimating demand for each program? Cs -$D (round your response to two decimal places)

Explanation / Answer

cost of underestimating the demand = selling price - cost of printing

= $5 - $1

= $4.

Thus Cs = $4.00

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