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A store owner has overstocked a certain item and decides
Chapter 3, Problem 140E(choose chapter or problem)
Problem 140E
A store owner has overstocked a certain item and decides to use the following promotion to decrease the supply. The item has a marked price of $100. For each customer purchasing the item during a particular day, the owner will reduce the price by a factor of one-half. Thus, the first customer will pay $50 for the item, the second will pay $25, and so on. Suppose that the number of customers who purchase the item during the day has a Poisson distribution with mean 2. Find the expected cost of the item at the end of the day. [Hint: The cost at the end of the day is 100(1/2)Y, where Y is the number of customers who have purchased the item.]
Questions & Answers
QUESTION:
Problem 140E
A store owner has overstocked a certain item and decides to use the following promotion to decrease the supply. The item has a marked price of $100. For each customer purchasing the item during a particular day, the owner will reduce the price by a factor of one-half. Thus, the first customer will pay $50 for the item, the second will pay $25, and so on. Suppose that the number of customers who purchase the item during the day has a Poisson distribution with mean 2. Find the expected cost of the item at the end of the day. [Hint: The cost at the end of the day is 100(1/2)Y, where Y is the number of customers who have purchased the item.]
ANSWER:
Solution:
Step 1 of 2:
It is given that a store owner overstocked a certain item and decided to use some technique to reduce the supply.
The item had a marked price of $100. The owner offers the product to the first customer by reducing the price by a factor of half and so on for the next customers in a particular day.
The number of customers purchasing the item in a particular day Y has the Poisson distribution with mean 2.
Cost of the product at the end of the day is 100. We have to find the expected cost of the product.