Question
Delaware Coffee Roasters, LLC. is considering moving its coffee roasting operation from the back of the store to some neighboring warehouse space. The company has
Delaware Coffee Roasters, LLC. is considering moving its coffee roasting operation from the back of the store to some neighboring warehouse space. The company has to decide how much space to rent and how to handle sales and distribution. They make a payoff table, shown below. Determine the expected value for each alternative using the given probabilities.
Acquire Stable economy (0.65) Slowing economy (0.35) 4,000 sq. ft, new trucks $105,000 - $65,450 4,000 sq. ft, keep truck $84,200 -$25,300 |
2,000 sq. ft, new trucks $74,350 -$38,900 2,000 sq. ft, keep truck $56,750 -$15,250 |
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