Quantitative methods

DS You are a vendor operating out of the Hastings Farmers Market, in Barbados. You buy and sell fruits and vegetables, but faced with the decision regarding the number of cases of Golden Apples to buy in order to maximise average monthly profits. The decision is made more difficult in light of uncertainty in demand (assuming that you can sell what is demanded, if you have stock on hand). Table 1 gives a breakdown of this scenario. Given the following probabilities: P(150) = 0.35, P(200) = 0.45, P(250) = 0.20 and your desire to maximise average monthly profit Table 1: Cases of Golden Apples Decision Payoffs are Profits $00 Monthly Demand (State of Nature) 150 200 250 Buy 150 50 50 50 Buy 200 35 75 75 Buy 250 25 55 100 The best estimate of the EVPI is