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believes the demand for the item will be either 2,000 units, 3,000 units, 4,000 units, or 5,000 units. a. Set up the payoff table for Larry's decision. b. Determine the number of units that Larry should produce using each of the following criteria: 1. maximax criterion 2. maximin criterion 3. minimax regret criterion

believes the demand for the item will be either 2,000 units, 3,000 units, 4,000 units, or 5,000 units. a. Set up the payoff table for Larry's decision. b. Determine the number of units that Larry should produce using each of the following criteria: 1. maximax criterion 2. maximin criterion 3. minimax regret criterion

Practical Management Science
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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19-8. Larry Jacava is considering producing a novelty item for golfers that will be sold through pro shops. Larry has decided on a selling price of $3.50 for the item. The item's variable cost of production is $2.00 per unit, with fixed costs of $3,750. Larry has marketed his product to local pro shops and believes the demand for the item will be either 2,000 units, 3,000 units, 4,000 units, or 5,000 units. a. Set up the payoff table for Larry's decision. b. Determine the number of units that Larry should produce using each of the following criteria: 1. maximax criterion 2. maximin criterion 3. minimax regret criterion
Transcribed Image Text:19-8. Larry Jacava is considering producing a novelty item for golfers that will be sold through pro shops. Larry has decided on a selling price of $3.50 for the item. The item's variable cost of production is $2.00 per unit, with fixed costs of $3,750. Larry has marketed his product to local pro shops and believes the demand for the item will be either 2,000 units, 3,000 units, 4,000 units, or 5,000 units. a. Set up the payoff table for Larry's decision. b. Determine the number of units that Larry should produce using each of the following criteria: 1. maximax criterion 2. maximin criterion 3. minimax regret criterion
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