Answered step by step
Verified Expert Solution
Question
1 Approved Answer
. Brilliant Color is a small supplier of chemicals and equipment that are used by some photographic stores to process 35mm lm. One product that
. Brilliant Color is a small supplier of chemicals and equipment that are used by some photographic stores to process 35mm lm. One product that Brilliant Color supplies is BC. John Kubick, president of Brilliant Coior, normally stocks 11, 12, or 13 cases of BC each week. For each case that John sells, he receives a prot of $35. Like many photographic chemicals, BCfi has a very short shelf life, so if a case is not sold by the end of the week, John must discard it. Since each caae costs John $56, he loses $56 for ever}.r case that is not sold by the end of the week. The probabilities for demand to be 11, 12 or 13 are 0.45, 0.35 and {1.2, respectively. (a Develop a payoff (cost) table for this case. [b What decision should John make if he is optimistic? (c l l ) What decision should John make if he is pessimistic? (d) What decision should John make if he wanted to maximize the expected prot? J l (e What decision should John make if he wanted to minimize maximum regret? (f Calcuiate the expected value of perfect information [EVPU of this
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started