A new edition of our management science textbook will be published a year from now. Our publisher currently has 2000 copies on hand and is deciding whether to do another printing before the new...

A new edition of our management science textbook will be published a year from now. Our publisher currently has 2000 copies on hand and is deciding whether to do another printing before the new edition comes out. The publisher estimates that demand for the book during the next year is governed by the probability distribution in the file P11_31.xlsx.


A production run incurs a fixed cost of $50,000 plus a variable cost of $50 per book printed. Books are sold for $80 per book. Any demand that cannot be met incurs a penalty cost of $10 per book, due to loss of goodwill. Half of any leftover books can be sold to Barnes and Noble for $35 per book. Our publisher is interested in maximizing expected profit. The following print-run sizes are under consideration: 0 (no production run), 1000, 2000, 4000, 6000, and 8000. What decision would you recommend? Use simulation with at least 100 replications. For your optimal decision, our publisher can be 90% certain that the actual profit associated with remaining sales of the current edition will be between what two values?