- #1
samchan5167
- 6
- 1
Homework Statement
An ice-cream store makes 150 ice-cream balls every day. The cost of making each ice-cream ball is $3. The price of an ice-cream ball is $8. The demand distribution is as follows: 100 ice-cream balls with probability 25%, 150 ice-cream balls with probability 50%, and 200 ice-cream balls with probability 25%
a. What is the store’s expected profit every day?
b. If the store decides to make 200 ice-cream balls every day, what is the store’s expected profit every day?
Homework Equations
The Attempt at a Solution
I'm confused whether i should use the probability for 200 ice-cream for part a since the store can only produced 150 ice-cream balls every day. But for part b, i should use the probability for 200 ice-cream balls, right?