Problem 775703: Do not include anything other than numbers in your responses. For example, do not include comma or dollar sign in your numbers. As a rule of thumb, keep 2 decimal places for larger numbers and 3 decimal places for smaller numbers less than 1. Zed and Adrian and run a small bicycle shop called "Z to A Bicycles". They must order bicycles for the coming season. Zed and Adrian estimate that the demand for bicycles this season will be 20, 30, 40, or 50 bicycles with probabilities of 0.2, 0.4, 0.3, and 0.1 respectively. Orders for the bicycles must be placed in quantities of twenty (20). The cost per bicycle is $70 if they order 20, $66 if they order 40, $56 if they order 60. The bicycles will be sold for $80 each if they are not on sale. Any bicycles left over at the end of the season will go on sale and will be sold at $50 each. Create a payoff table that helps Z to A Bicycle decide how many bicycles (20, 40, or 60) to order. Complete the following Payoff Table: Demand=20 Demand=30 Demand=40 Demand=50 Order20 Order40 Order60 Problem 188101: Do not include anything other than numbers in your responses. For example, do not include comma or dollar sign in your numbers. As a rule of thumb, keep 2 decimal places for larger numbers and 3 decimal places for smaller numbers less than 1. SciTools Incorporated, a company that specializes in scientific instruments, has been invited to make a bid on a government contract. The contract calls for a specific number of these instruments to be delivered during the coming year. The bids must be sealed, so that no company knows what the others are bidding, and the low bid wins the contract. SciTools estimates that it will cost $90k to supply the instruments if it wins the contract. The company is deciding to bid against the competitors. On the basis of past contracts of this type, SciTools believes that the competitors' bids are based on the following probabilities and they have created the payoff table as follows. Probability 0.45 0.1 0.45 Competitors' lowest bid is between $95k and $110k between $110k and $120k more than $120k bid 95k (low) 5k 5k 5k bid 110k (medium) 0 20K 20k bid 120k (high) 0 0 30k Note: You can drop 3 zeros for numbers in thousands. How much (in thousands) is the expected payoff if the company bids low? How much (in thousands) is the expected payoff if the company bids medium? How much (in thousands) is the expected payoff if the company bids high? What is the best decision based on expected value approach? (Bid Low/Bid Medium/Bid High) How much (in thousands) is the expected payoff if the company has full information about competitors' bid? Calculate the expected value of perfect information (in thousands)? How much (in thousands) is the maximum regret of the company if they bid low? How much (in thousands) is the maximum regret of the company if they bid medium? How much (in thousands) is the maximum regret of the company if they bid high? What is the best decision based on minimax regret approach? (Bid Low/Bid Medium/Bid High)
