II. Bramptinos

If Humber chooses the heavy production plan, they will make a price reduction offer to Bramptinos (a large supermarket chain) on the condition that Bramptinos purchases all units produced under the heavy plan.

There is a 36% chance that Bramptinos will accept this offer. If Bramptinos accepts, Humber is guaranteed to sell all the 46,000 units produced under the heavy production plan at $4.49 each. Although Humber will sell Rex for $0.24 less at this price, Humber values the guarantee and sees the relationship as an opportunity for expansion in the long run. If Bramptinos declines the offer, the loaves will still sell based on current demand conditions (low, medium, or high).

Incorrect

1. Select the decision tree below that best describes the updated decision problem.
6. i) What production plan should Humber adopt now? Select an answer Light Moderate Heavy Light or Moderate Light or Heavy Moderate or Heavy Indifferent
11. ii) What is the expected gross profit of this decision? Round EMV to the nearest cent. EMV = $