Crazy Joe runs a tube rental on Ohio River. He currently leases tubes from a dealer in Pittsburgh at a cost of $40 per tube per day. On Saturdays, he picks up the tubes and drives to a launching point on the river, where he rents tubes to white-water enthusiasts for $100 per tube per day. Crazy Joe records the Saturday demand for tubes and finds the demand distribution. Suppose Joe already holds 15 tubes in the morning. If he adds an extra tube (to make the total number of tubes 16), what is the expected cost associated with this extra tube (the 16th tube) he adds?

a $22

b $20

c $36

d $30

e $27

f $40

g $60

Crazy Joe runs a tube rental on Ohio River. He currently leases tubes from a dealer in Pittsburgh at a cost of $40 per tube per day. On Saturdays, he picks up the tubes and drives to a launching point on the river, where he rents tubes to white-water enthusiasts for $100 per tube per day. Crazy Joe records the Saturday demand for tubes and finds the demand distribution. Suppose Joe already holds 15 tubes in the morning. If he adds an extra tube (to make the total number of tubes 16), what is the expected benefit associated with this extra tube (the 16th tube) he adds?

datas same as above

a $22

b $4

c $5

d $25

e $27

f $40

g $45

h $48

Crazy Joe runs a tube rental on Ohio River. He currently leases tubes from a dealer in Pittsburgh at a cost of $40 per tube per day. On Saturdays, he picks up the tubes and drives to a launching point on the river, where he rents tubes to white-water enthusiasts for $100 per tube per day. Crazy Joe records the Saturday demand for tubes and finds the demand distribution. What is the optimal # of tubes Joe should hold in the morning?

datas same as above

a 16

b 15

c 14

d 18

e 19

f 17

g 20

Demand (D) Frequency Probability 9 Service Level P (D = 9) 0.05 10 1 10 1/20=0.05 0.05 11 1 11 0.10 12 0.10 12 NNN 0.10 13 14 13 0.20 0.30 0.40 0.10 14 15 3 0.15 15 0.55 16 3 0.15 16 17 2. 0.10 17 0.70 0.80 0.90 18 2 0.10 18 19 1 0.05 19 0.95 1 1 20 1 0.05 20 1.00 Demand (D) Frequency Probability 9 Service Level P (D = 9) 0.05 10 1 10 1/20=0.05 0.05 11 1 11 0.10 12 0.10 12 NNN 0.10 13 14 13 0.20 0.30 0.40 0.10 14 15 3 0.15 15 0.55 16 3 0.15 16 17 2. 0.10 17 0.70 0.80 0.90 18 2 0.10 18 19 1 0.05 19 0.95 1 1 20 1 0.05 20 1.00