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A grocer must decide how many cases of milk to stock each week in order to meet demand. The probability distribution of demand is Demand
A grocer must decide how many cases of milk to stock each week in order to meet demand. The probability distribution of demand is Demand (cases) Probability 15 .20 16 .25 17 .40 18 .15 1.00 Each case costs the grocer $10, who, in turn, sells it for $12. Unsold cases are sold to a local farmer (who mixes it with feed for livestock) for $2 per case. If a shortage exists, the grocer considers the prot of $2 per case to be a cost. In addition, customer ill will costs are $2 per case. Thus, a shortage cost of $4 per case is incurred. 1.What is the payoff when the supply is 16 and the demand is 15? 2.what is the payoff when the supply is 15 and the demand is 18? 3.what is the payoff when the supply is 16 and the demand is 18? 4. what is the payoff when the supply is 15 and the demand is 16? 5.what is the payoff when the supply is 16 and the demand is 16 ? 6.what is the payoff when the supply is 15 and the demand is 17? 7.what is the payoff when the supply is 15 and the demand is 15? 8.what is the payoff when the supply is 18 and the demand is 16? 9.what is the payoff when the supply is 17 and the demand is 16
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