Answered: The produce manager at the local Pig &…

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

The produce manager at the local Pig & Whistle grocery store must determine how many pounds of bananas to order weekly. Based upon past experience, the demand for bananas is expected to be 100, 150, 200, or 250 pounds with the following probabilities: 100lbs 0.20; 150lbs 0.25, 200lbs 0.35, 250lbs 0.20. The bananas cost the store $.45 per pound and are sold for $.85 per pound. Any unsold bananas at the end of each week are sold to a local zoo for $.30 per pound. Use your knowledge of decision analysis to model and solve this problem in order to recommend how many pounds of bananas the manager should order each week

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