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1 Every morning, a street vendor can buy newspapers for $2 and resell them for $2.50. Daily demand is between 6 and 10 with probabilities
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Every morning, a street vendor can buy newspapers for $2 and resell them for $2.50. Daily demand is between 6 and 10 with probabilities of 0.1, 0.1, 0.3, 0.4 and 0.1, respectively. Blanks 1-4/a) How many newspapers should the street vendor buy based on the optimistic decision criterion (Blank 1], the conservative decision criterion (Blank 2), the minimax regret criterion (Blank 3) or the expected value criterion (Blank 4)? For example, if the decision was 6 or 7, write "6 or 7" Blanks 5-8/e) Now suppose that at the end of the day, each unsold newsvendor can be returned for a partial refund of $0.50. How does your new analysis change the prior decisions based on the optimistic decision criterion (Blank 5), the conservative decision criterion (Blank 6), the minimax regret criterion (Blank 7) or the expected value criterion (Blank 8)? Again, if the new decision was 6 or 7. write "6 or 7" Blank # 1 I " ex Blank#2I' 4/ Blank # 3 I Q/ Blank#4 I Q/ Blank # SI Q/ Blank at a I 1v Blank at 7 I '/ Blank # 8 I' 6/Step by Step Solution
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