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A department store is about to order deluxe, standard, and economy grade DVD players for next year s inventory. The state of the nation
A department store is about to order deluxe, standard, and economy grade DVD players for next year s inventory. The state of the nation s economy (fate) during the year will be a factor on sales for that year. Records over the past 5 years show that if the economy is up, the store will net,, and million dollars, respectively, on sales of deluxe, standard, and economy grade models; if the economy is down, the company will net,, and million dollars, respectively, on sales of deluxe, standard, and economy grade models. a) set up a payoff matrix for thus problem b)Find P* the optimal strategy for the row player, the department store. Find Q, the optimal strategy for the column player. the economy (fate). Find v, the value of the game c) how should the companys bugger be allocated to each grade of DVD player to maximize their return irrespective of what the economy does the following year? the company should spend of the budget on deluxe, of their budget on standard, and of their budget on economy d) what is the expected value of the game to the company if it orders only deluxe DVD players and fate plays the strategy Down ? if the company plays its optimal strategy and fate plays the strategy down ? Dept. Store Deluxe Standard Economy Economy (fate) Up Down
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