5. A concessionaire for the local ballpark has developed a table of conditional values for the various alternatives (stocking decision) and states of nature (size of crowd). States of Nature (size of crowd) Large Alternatives Large Inventory | Average | Small $22,000 S12,000 | - $2,000 |Average Inventory | S15,000 $12,000 $6,000 |Small Inventory $ 9,000 | S 6,000 $5,000 If the probabilities associated with the states of nature are 0.30 for a large crowd, 0.50 for an average crowd, and 0.20 for a small crowd, determine: (a) the opportunity loss table.
5. A concessionaire for the local ballpark has developed a table of conditional values for the various alternatives (stocking decision) and states of nature (size of crowd). States of Nature (size of crowd) Large Alternatives Large Inventory | Average | Small $22,000 S12,000 | - $2,000 |Average Inventory | S15,000 $12,000 $6,000 |Small Inventory $ 9,000 | S 6,000 $5,000 If the probabilities associated with the states of nature are 0.30 for a large crowd, 0.50 for an average crowd, and 0.20 for a small crowd, determine: (a) the opportunity loss table.
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Chapter1: Combinatorial Analysis
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Transcribed Image Text:5. A concessionaire for the local ballpark has developed a table of conditional values for
the various alternatives (stocking decision) and states of nature (size of crowd).
States of Nature
(size of crowd)
Large
Average Small
$22,000 $12,000 - $2,000
Alternatives
Large Inventory
Average Inventory $15,000 $12,000
Small Inventory
$6,000
$ 9,000 $ 6,000 $5,000
If the probabilities associated with the states of nature are 0.30 for a large crowd, 0.50
for an average crowd, and 0.20 for a small crowd, determine:
(a) the opportunity loss table.
States of Nature
Large Average
Alternatives
Small
8,000
Large
Average
Small
7,000
13,000
6,000
1,000 ANSWER
Transcribed Image Text:(b) minimum expected opportunity loss (EOL).
minimum EOL = $1,600
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