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An appliance dealer must decide how many (if any) new microwave ovens to order for next month. The ovens cost $250 and sell for $

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An appliance dealer must decide how many (if any) new microwave ovens to order for next month. The ovens cost $250 and sell for $ is coming out with a new product line in two months, any ovens not sold next month will have to be sold at the dealer's half price clea appliance dealer feels they suffer a loss of $35 for every oven demanded when they are out of stock. On the basis of past months' sale the probabilities of monthly demand (D) for 0,1,2, or 3 ovens to be 0.3,0.4,0.2, and 0.1 , respectively. The dealer is considering conducting a telephone survey on customers' attitudes towards microwave ovens. The results of the survey unfavorable (U), or no opinion (N). The dealer's probability estimates for the survey results based on the number of units demanded a (a) What is the dealer's optimal decision without conducting the survey? The dealer should purchase 0 ovens. The dealer should purchase 1 oven. The dealer should purchase 2 ovens. The dealer should purchase 3 ovens. (b) What is the EVPI (in \$)? $ (c) Based on the survey results, what is the optimal decision strategy for the dealer? If the survey results are favorable, the dealer should purchase the survey results return no opinion, the dealer should purchase If the survey results are unfavorable, the dealer s (d) What is the maximum amount he should pay for this survey (in \$)? viens to order for next month. The ovens cost $250 and sell for $330. Because the oven company two months, any ovens not sold next month will have to be sold at the dealer's half price clearance sale. Additionally, the $ of $35 for every oven demanded when they are out of stock. On the basis of past months' sales data, the dealer estimates for 0,1,2, or 3 ovens to be 0.3,0.4,0.2, and 0.1 , respectively. telephone survey on customers' attitudes towards microwave ovens. The results of the survey will either be favorable (F), dealer's probability estimates for the survey results based on the number of units demanded are shown in the following table. ion without conducting the survey? 0 ovens. 1 oven. 2 ovens. 3 ovens. is the optimal decision strategy for the dealer? the dealer should purchase n, the dealer should purchase If the survey results are unfavorable, the dealer should purchase If should pay for this survey (in \$)

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