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Broncs Toy Manufacturing Inc. is heated by coal during the winter. The management is faced with the following problem: Coal ordered in September costs

 

Broncs Toy Manufacturing Inc. is heated by coal during the winter. The management is faced with the following problem: Coal ordered in September costs $15 per ton. If purchased during the winter, the cost is $19 per ton. Leftover coal can be sold back in the spring for $8 per ton. The coal storage space is needed for expanded summer operations; hence all the leftover coal must be sold. Winter may be mild, normal, or very cold. Coal requirements for a mild winter are 20 tons, for a normal winter 30 tons, and for a very cold winter 50 tons. Construct a payoff table for this decision problem. DEFINE THE OBJECTIVE, DECISION ALTERNATIVES, AND STATES OF NATURE CLEARLY. SHOW YOUR WORK.

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