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A vendor for the local ballpark food stand is questioning whether to stock his concession with a large or small inventory. He believes that it
A vendor for the local ballpark food stand is questioning whether to stock his concession with a large or small inventory. He believes that it will depend upon the size of the crowd. He has developed a payoff matrix for the various alternatives (stocking decision) and states of nature (size of crowd). What is the answer using the criterion of realism (hurwicz) with an alpha of .7? PROFIT ($) Large Average Small Alternatives Crowd Crowd Crowd Large Inventory $220,000 $50,000 -$2,000 Small Inventory $90,000 $70,000 -$5,000 Probability .20 .50 .30 A) $61,500 B) $130,000 C) $64,600 D) $23,500 E) $153,400
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