Answer Happy

he book publishing supply chain consists of authors, publisher,
bookstores and end-customers. For a latest thriller novel on the
market, it costs the publisher $16 to print a copy of the book,
which is sold to the bookstore at $20. The publisher also pays the
author a royalty, which is around 10%. That is, the author gets 10%
of the publisher’s total revenues from the book sales to the campus
bookstore. Suppose that the retail price of a latest thriller novel
is $60 per book.
Demand
Probability
10,000
0.6
50,000
0.2
100,000
0.1
200,000
0.07
500,000
0.02
1,000,000
0.01
Hint: When you are looking up a target value in a table
and the target value falls between two entries, choose the entry
that leads to the larger order quantity.
Suppose, instead of the bookstore placing an order, the
publisher determines the number of copies of the book to be
produced (and stocked) on the bookstore’s shelves. That is, the
bookstore no longer makes inventory decisions. Nevertheless, the
bookstore still makes $40 (=$60 - $20) for each copy of the
book sold. Any leftover books in the store can be salvaged by the
publisher at $15 per book. Note that the book author or the
bookstore do not receive royalties/money from the books salvaged by
the publisher. How many books should the publisher produce and
stock at the bookstore?
Group of answer choices
500,000
50,000
100,000
10,000
200,000