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Holiday Galore Company has chosen to sell Christmas wrapping paper. They have to choose how many rolls of Christmas wrapping paper to sell in their
Holiday Galore Company has chosen to sell Christmas wrapping paper. They have to choose how many rolls of Christmas wrapping paper to sell in their first year. Demand can either be 50K, 100K, 200K, or 500K this year. Demand in Cases Per Year Probability 50,000 15 100,000 .25 200,000 .45 500,000 .15 It costs them $3 to create each roll of signature Christmas wrapping paper and they can sell it for $10 per roll. The salvage value for the wrapping paper is $5 per roll- if they make extra they can sell it the following year at a discounted price. The lost good will is $4 per every missed opportunity to sell this wrapping paper. What is the expected value of perfect information concerning demand? (Round to the nearest whole number): EPPI: EVPI
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