The Rifkan Rifraf Corporation purchases a highly perishable product on a daily basis at a unit cost of $30. If each product was not sold for $50 and was left over at the end of the day, it would be discarded since it has no salvage value. Because of the occasional and infrequent need for this product, the demand each day never exceeds four units. The purchasing manager has made a study of the product’s demand situation and has determined the following: ph25

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Demand Probablity (units) of demand 07334 .05 .30 20 32222 20 25 Required: a Construct a pay-off matrix (table) for the problem faced by the Rifkan Rifraf Corporation using profit as the decision criterion. b Determine the optimal strategy that will produce the highest expected pay-off under uncertainty. e Determine the expected value of perfect information.