Farm Grown, Inc., produces cases of perishable food products. Each case contains an assortment of veg- etables and other farm products. Each case costs $5 and sells for $15. If there are any cases not sold by the end of the day, they are sold to a large food pro- cessing company for $3 a case. The probability that daily demand will be 100 cases is 0.3, the probabil- ity that daily demand will be 200 cases is 0.4, and the probability that daily demand will be 300 cases is 0.3. Farm Grown has a policy of always satisfying customer demands. If its own supply of cases is less than the demand, it buys the necessary vegetables from a competitor. The estimated cost of doing this is $16 per case. a. Draw a decision table for this problem. b. What do you recommend?
Contingency Table
A contingency table can be defined as the visual representation of the relationship between two or more categorical variables that can be evaluated and registered. It is a categorical version of the scatterplot, which is used to investigate the linear relationship between two variables. A contingency table is indeed a type of frequency distribution table that displays two variables at the same time.
Binomial Distribution
Binomial is an algebraic expression of the sum or the difference of two terms. Before knowing about binomial distribution, we must know about the binomial theorem.
Farm Grown, Inc., produces cases of perishable food products. Each case contains an assortment of veg- etables and other farm products. Each case costs $5 and sells for $15. If there are any cases not sold by the end of the day, they are sold to a large food pro- cessing company for $3 a case. The probability that daily demand will be 100 cases is 0.3, the probabil- ity that daily demand will be 200 cases is 0.4, and the probability that daily demand will be 300 cases is 0.3. Farm Grown has a policy of always satisfying customer demands. If its own supply of cases is less than the demand, it buys the necessary vegetables from a competitor. The estimated cost of doing this is $16 per case.
a. Draw a decision table for this problem.
b. What do you recommend?
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