2. (Decision Analysis) A newsvendor can buy the The Unrecord for $1.00 and sell it fo $1.25. However, he must buy the papers before he knows how many he can ac.Ually se'l. If he buys more papers than he can sel , he disposes of the excess at no additional cost. If he does not buy enough papers, he loses potential sales. He knows that he can sell either :0, 100 or 150 papers because ne has three potential customers who buy the newspapers from him in batones of 50 papers. He can buy papers himself only in in. Itiples of 50. the probability of the newsvendor having one customer in a day is (.. to customers in a day is 0.5 and three customers in a day is 0.2. a. Howmany newspapers sho Id the newsvendor stock each day using expected value approach? Calculate the E. P . c. How many newspapers should the ne vsvendor stock each day using the minmal regret approach: 3. (Decision tree, A farmer in 'seorgia must decide which crop to plant next year on his land orn, Peanuts, or Soybeans. the return from each crop will be devendent "pon the level of the demand. he payoff table for the farmer is as follows C--O - H G 'DI MANU LOW DEMAND CORN 27,00u 18,002 CANUIL 10,000 12,000 FOYBANS 22,000 20,00 The farmer believes that low demand has three times more chance than high demand. However, the farmer can conduct a market test to see if there is a popular local competitor or not. The probability of a popular competitor is estimated to be O.L. The farmer believes that if there is such a competitor the probability of high demand is C.15, and in the absence of a popular competitor the probability of high demand is 0.4. Calculate the E:3. 4. (Decision tree) The Miramar Company is going to introduce one of these new products: a widget, a hummer, or a nimnot. The market conditions (favorable, stable, or unfavorable) will determine the profit or loss the company realites, as shown in the following payoff table. Market Conditions ([ rob ibility) Pr. duct Favorable (0.2) Stable (0..) Infavorable (0.1) Widget =120,000 $70,000 5-30,000 Hummer $60,000 $40,000 -20,000 Nimnot $35,000 $30,000 $30,000 The Company is considering contracting with a market research firm to do a survey to determine future market conditions. the results of the survey will indicate either positive or negative market conditions