the wholesale price as 𝑤 = 400. • Then, the expected profit of the seller is given by: 𝑟# = 𝑝 ∫ % & 𝑦𝑓(𝑦)𝑑𝑦 + 𝑝𝑞 ∫ & ' 𝑓(𝑦)𝑑𝑦 − 𝑤𝑞 • Thus, the purchase volume 𝑞∗ that maximizes the expected profit and the maximum expected profit 𝑟# ∗ achieved by this volume are: 𝑞∗ = 𝐹*+ ⁄ 𝑝 − 𝑤 𝑝 = 𝑦. + ⁄ (𝑦/ − 𝑦. ) 3 = 560 𝑟# ∗ = , &∗$*0% $ !(0&*0%) + ,&∗(0&*&∗) 0&*0% − 𝑤𝑞∗ = 104,000 • As a result, the profit of the maker and the total expected profit are: 𝑟$ = 𝑤 − 𝑐 𝑞∗ = (400 − 200)×560 = 112,000 𝑟$ + 𝑟# ∗ = 112,000 + 104,000 = 216,000 < 224,000 = 𝑟∗ Model 2: Newsvendor Formulation