Problem
Joe decided to open a food stand at a local market near his house. He planned to buy apples from his local farm and sell at the market near his house. He estimated cost of renting a truck to transport the apple of $20 per week. Cost of the apple to Joe is $0,90 per pound. He will sell the apples on tbe market btw 10am to 6pm. the booth rental is $40 per week. The apples will be sell for $1,20 per pound. All the apples not sold by 6pm will be discard. The demand for the apples are unpredictable, Joe estimates weelky demand before placing the order with the farmer and renting the transportation. Mean is 350 and standard deviation it is 100.
What is the salvage value of the apple? How many apples should joe stock? What it is the profit at this stocking quantity?