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Sam's Book Store

Sam’s Bookstore has a quantity discount with its publisher. The more books it orders, the more discount it gets. Sam’s Bookstore would like to order a hot new hardback novel. However, a paperback version will lunched soon, so, at the time the paperback comes out, Sam’s decides to put a hard copy on sale. To calculate how many copies Sam’s would have to order, we conduct a model based on a quantity order and discount. We put 2000 books as a trial number. The higher demand leads to the higher profit. We then conduct another model calculating a probability based on previous sales of other similar novel which portrays that the demand would likely fall from 2000 to 2500 units. We then use the probabilities to calculate an expected profit. The largest profit would be $12,250 with the quantity of 2000 books.