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Kris is considering taking her poutine food truck to the local wine festival to vend. She is pondering the amount of food to stock. The
Kris is considering taking her poutine food truck to the local wine festival to vend. She is pondering the amount of food to stock. The probability of high demand is 0.3, medium demand 0.5, and 0.2 for low demand. Given the payoffs below, which option should she choose? High demand Average demand Low demand Large stock $21414.96 $12849.50 $-2389.45 Medium stock $13130.2 $10,000 $6,000 Small stock $9,000 $8,000 $4603.56 a. Medium, because its EMV = $10139.06 b. Small, because its EMV = $7620.71 c. None of the other choices. d. Large, because its EMV = $14049.24 e. Large, because its EMV = $12371.35 O f. Small, because its EMV = $10045.46 Og. Medium, because its EMV = $9139.06
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