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Problem: A bicycle shop Zed and Adrian and run a small bicycle shop called "Z to A Bicycles". They must order bicycles for the coming season. Orders for the bicycles must be placed in quantities of twenty (20). The cost per bicycle is $70 if they order 20, $67 if they order 40, $65 if they order 60, and $64 if they order 80. The bicycles will be sold for $100 each. Any bicycles left over at the end of the season can be sold (for certain) at $45 each. If Zed and Adrian run out of bicycles during the season, then they will suffer a loss of "goodwill" among their customers. They estimate this goodwill loss to be $5 per customer who was unable to buy a bicycle. Zed and Adrian estimate that the demand for bicycles this season will be 10, 30, 50, or 70 bicycles with probabilities of 0.2, 0.4, 0.3, and 0.1 respectively. Instruction: Given the problem below "The Bicycle Shop" Provide the correct answers with solutions of the following: a. Payoff Table b. Opportunistic Loss Table c. Expected Value Criterion d. Maximax Criterion e. Maximin Criterion f. Minimax Criterion g. Summary Table of all criterion

Problem: A bicycle shop Zed and Adrian and run a small bicycle shop called "Z to A Bicycles". They must order bicycles for the coming season. Orders for the bicycles must be placed in quantities of twenty (20). The cost per bicycle is $70 if they order 20, $67 if they order 40, $65 if they order 60, and $64 if they order 80. The bicycles will be sold for $100 each. Any bicycles left over at the end of the season can be sold (for certain) at $45 each. If Zed and Adrian run out of bicycles during the season, then they will suffer a loss of "goodwill" among their customers. They estimate this goodwill loss to be $5 per customer who was unable to buy a bicycle. Zed and Adrian estimate that the demand for bicycles this season will be 10, 30, 50, or 70 bicycles with probabilities of 0.2, 0.4, 0.3, and 0.1 respectively. Instruction: Given the problem below "The Bicycle Shop" Provide the correct answers with solutions of the following: a. Payoff Table b. Opportunistic Loss Table c. Expected Value Criterion d. Maximax Criterion e. Maximin Criterion f. Minimax Criterion g. Summary Table of all 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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Problem: A bicycle shop Zed and Adrian and run a small bicycle shop called "Z to A Bicycles". They must order bicycles for the coming season. Orders for the bicycles must be placed in quantities of twenty (20). The cost per bicycle is $70 if they order 20, $67 if they order 40, $65 if they order 60, and $64 if they order 80. The bicycles will be sold for $100 each. Any bicycles left over at the end of the season can be sold (for certain) at $45 each. If Zed and Adrian run out of bicycles during the season, then they will suffer a loss of "goodwill" among their customers. They estimate this goodwill loss to be $5 per customer who was unable to buy a bicycle. Zed and Adrian estimate that the demand for bicycles this season will be 10, 30, 50, or 70 bicycles with probabilities of 0.2, 0.4, 0.3, and 0.1 respectively. Instruction: Given the problem below "The Bicycle Shop" Provide the correct answers with solutions of the following: a. Payoff Table b. Opportunistic Loss Table c. Expected Value Criterion d. Maximax Criterion e. Maximin Criterion f. Minimax Criterion g. Summary Table of all criterion
Transcribed Image Text:Problem: A bicycle shop Zed and Adrian and run a small bicycle shop called "Z to A Bicycles". They must order bicycles for the coming season. Orders for the bicycles must be placed in quantities of twenty (20). The cost per bicycle is $70 if they order 20, $67 if they order 40, $65 if they order 60, and $64 if they order 80. The bicycles will be sold for $100 each. Any bicycles left over at the end of the season can be sold (for certain) at $45 each. If Zed and Adrian run out of bicycles during the season, then they will suffer a loss of "goodwill" among their customers. They estimate this goodwill loss to be $5 per customer who was unable to buy a bicycle. Zed and Adrian estimate that the demand for bicycles this season will be 10, 30, 50, or 70 bicycles with probabilities of 0.2, 0.4, 0.3, and 0.1 respectively. Instruction: Given the problem below "The Bicycle Shop" Provide the correct answers with solutions of the following: a. Payoff Table b. Opportunistic Loss Table c. Expected Value Criterion d. Maximax Criterion e. Maximin Criterion f. Minimax Criterion g. Summary Table of all criterion
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