Based on the given information, Susan's conditional profits table for jam is: Demand 5 cases 6 cases 7 cases 8 cases Produce p=0.05 p=0.30 p=0.50 p=0.15 5 cases __________ ___________ ___________ ____________ b) The number of cases that Susan should produce to achieve maximum expected value (EMV) is _____ cases. c) The EMV of stocking this number of cases is $_______.
Based on the given information, Susan's conditional profits table for jam is: Demand 5 cases 6 cases 7 cases 8 cases Produce p=0.05 p=0.30 p=0.50 p=0.15 5 cases __________ ___________ ___________ ____________ b) The number of cases that Susan should produce to achieve maximum expected value (EMV) is _____ cases. c) The EMV of stocking this number of cases is $_______.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Question
8.
Palmer Jam Company is a small manufacturer of several different jam products. One product is an organic jam that has no preservatives, sold to retail outlets. Susan Palmer must decide how many cases of jam to manufacture each month. The probability that demand will be
5
cases is
0.05,
for
6
cases it is
0.30,
for
7
cases it is
0.50,
and for
8
cases it is
0.15.
The cost of every case is
$45,
and the price Susan gets for each case is
$90.
Unfortunately, any cases not sold by the end of the month are of no value as a result of spoilage.Part 2
Based on the given information, Susan's conditional profits table for jam is:
|
|
Demand
|
|||
|
|
5
cases |
6
cases |
7
cases |
8
cases |
|
Produce
|
p=0.05
|
p=0.30
|
p=0.50
|
p=0.15
|
|
5
cases |
__________ | ___________ | ___________ | ____________ |
b) The number of cases that Susan should produce to achieve maximum expected value (EMV) is _____ cases.
c) The EMV of stocking this number of cases is $_______.
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