Problem:
McHardee Press publishes the Fast Food Menu Book and wishes to determine how many copies to print. There is a fixed cost of $6,000 to produce the book and the incremental profit per copy is $0.50. Any unsold copies of the book can be sold at salvage at a $.70 loss. Sales for this edition are estimated to be normally distributed. The most likely sales volume is 14,000 copies and they believe there is a 3% chance that sales will exceed 20,000.
a. How many copies should be printed?
b. If the incremental profit per copy drops to $0.40, how many copies should be printed?