the Islander Fishing Company purchases clams for $1.50 per pound from fishermen and sells them to various restaurants for $2.50 per pound. any clams not sold to the restaurants by the end of the week can be sold to a local soup company for $0.50 per pound. the company can purchase 500, 1,000, or 2,000 pounds. the probabilities of various levels of demand are as follows:

Demand (Pounds) Probability

500 0.2

1,000 0.4

2,000 0.4

a. For each possible purchase level (500, 1,000, or 2,000 pounds), compute the profit (or loss) for each level of demand.

b. Determine the optimal action based on the maximax criterion.

c. Determine the optimal action based on the maximin criterion.

e. Compute the standard deviation for each possible purchase level.