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The owner of a small drugstore is to order copies of a news magazine for the n potential readers among his customers. Customers act independently and each one of them will actually express interest in buying the news magazine with probability p. Suppose that

the store owner actually pays B for each copy of the news magazine, and the price to customers is C. If magazines left at the end of the week have no salvage value, what is the optimum number of copies to order?

So I'm not too sure on how to approach this question. I have several ideas but I am not sure on how to complete the question.

I think that the optimum number of copies to order would be the number such that the owner's expected profit is maximised, ie maximising E(C-B).

Now the owner has a probability p of making C and has probability of (1-p) of losing B since the customer won't buy anything.

Where can I go from here?

EDIT: Actually let's assume that the owner buys N copies and sells i copies thus he would want to maximise E(iC-NB) = iE(C) - NE(B), now how do I go about finding E(C) and E(B)?

the store owner actually pays B for each copy of the news magazine, and the price to customers is C. If magazines left at the end of the week have no salvage value, what is the optimum number of copies to order?

So I'm not too sure on how to approach this question. I have several ideas but I am not sure on how to complete the question.

I think that the optimum number of copies to order would be the number such that the owner's expected profit is maximised, ie maximising E(C-B).

Now the owner has a probability p of making C and has probability of (1-p) of losing B since the customer won't buy anything.

Where can I go from here?

EDIT: Actually let's assume that the owner buys N copies and sells i copies thus he would want to maximise E(iC-NB) = iE(C) - NE(B), now how do I go about finding E(C) and E(B)?

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