7. Lawson's Department Store faces a buying decision for a seasonal product for which demand can be high, medium, or low. The purchaser for Lawson's can order 1, 2, or 3 lots of the product before the season begins but cannot reorder later. Profit projections (in thousands of dollars) are shown. State of Nature High Demand S1 Medium Demand Low Demand Decision Alternative S2 S3 Order 1 lot, di Order 2 lots, dz Order 3 lots, dz 60 60 50 30 10 80 80 100 70
7. Lawson's Department Store faces a buying decision for a seasonal product for which demand can be high, medium, or low. The purchaser for Lawson's can order 1, 2, or 3 lots of the product before the season begins but cannot reorder later. Profit projections (in thousands of dollars) are shown. State of Nature High Demand S1 Medium Demand Low Demand Decision Alternative S2 S3 Order 1 lot, di Order 2 lots, dz Order 3 lots, dz 60 60 50 30 10 80 80 100 70
MATLAB: An Introduction with Applications
6th Edition
ISBN:9781119256830
Author:Amos Gilat
Publisher:Amos Gilat
Chapter1: Starting With Matlab
Section: Chapter Questions
Problem 1P
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What is the
What is the expected value of sample information?
What is the efficiency of the survey information?
Transcribed Image Text:7. Lawson's Department Store faces a buying decision for a seasonal product for which
demand can be high, medium, or low. The purchaser for Lawson's can order 1, 2, or 3 lots of
the product before the season begins but cannot reorder later. Profit projections (in
thousands of dollars) are shown.
State of Nature
High Demand
Medium Demand
Low Demand
Decision Alternative
S3
Order 1 lot, di
Order 2 lots, dz
Order 3 lots, dz
60
60
50
80
80
30
100
70
10
Transcribed Image Text:b. At each preseason sales meeting, the vice president of sales provides a personal opinion
regarding potential demand for this product. Because of the vice president's enthusiasm
and optimistic nature, the predictions of market conditions have always been either
"excellent" (E) or "very good" (V). Probabilities are as follows:
P(E) = 0.70
P(V) = 0.30
P(s |E) = 0.34
P(82|E) = 0.32
P(83|E) = 0.34
P(s1|V) = 0.20
P(s2|V) = 0.26
P(s3|V) = 0.54
%3D
%3D
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