MERCHANDISE DISPLAYS
Response to the following problem:
The upscale toy store August Kids has a picture window with 100 linear feet of display space. The theme this month is bicycles and tricycles. At least ten tricycles and eight bicycles are to be displayed. Each tricycle needs three linear feet of space in the window display, and each bicycle requires five linear feet. August Kids makes a profit of $40 on each tricycle and $80 on each bicycle it sells. The probability that, on a given day, a displayed tricycle will be sold is. 10 and that a displayed bicycle will be sold is .12.
Solve for the optimal number of tricycles and bicycles August Kids should display in its picture window daily under each of the following objectives:
a. Maximize total expected daily profit.
b. Maximize the total expected number of daily sales of tricycles and bicycles.
c. Minimize the total number of tricycles and bicycles displayed.