Analyze the problem below and show your solution in an orderly manner. XYZ Boutique stocks and sells fashion clothing for men and women. The firm plans to order a designer swimwear at a cost of P2,500 this coming summer season. The unit selling price of this swimwear will be Php4,000 during this summer season. When the summer ends, the swimwear will be sold at a post-summer sale for Php1,500 per unit because the product will be out of fashion in the next year. The demand for the product during the summer season is shown below. Demand (units) Probability 300 0.20 400 0.30 500 0.30 600 0.15 700 0.05 Develop a table of conditional losses including both opportunity cost of Php1,500 per unit and obsolescence cost of Php1,000 per unit. Determine the stocking action which minimizes expected loss. What is the expected value of perfect information? Determine the optimal stocking action when using the rationality criterion and criterion of maximum likelihood.
Analyze the problem below and show your solution in an orderly manner.
XYZ Boutique stocks and sells fashion clothing for men and women. The firm plans to
order a designer swimwear at a cost of P2,500 this coming summer season. The unit
selling price of this swimwear will be Php4,000 during this summer season. When the
summer ends, the swimwear will be sold at a post-summer sale for Php1,500 per unit
because the product will be out of fashion in the next year. The demand for the product
during the summer season is shown below.
Demand (units) Probability
300 0.20
400 0.30
500 0.30
600 0.15
700 0.05
Develop a table of conditional losses including both opportunity cost of Php1,500 per
unit and obsolescence cost of Php1,000 per unit. Determine the stocking action which
minimizes expected loss. What is the
the optimal stocking action when using the rationality criterion and criterion of maximum
likelihood.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
