Using Excel

Ora's Organics is the name of a small family farm in western lowa that produces cases of vegetables for an outdoor market in Dubuque, Iowa. Each case costs $6.50 to produce and is sold for $15. If there are cases leftover when the market closes, they are given to a local food bank The potential demand levels and estimated probabilities are as follows: 10 cases, 0.15; 20 cases, 0.25; 30 cases, 0.40, 40 cases 0.20. Ora, the farm manager, wants to determine the number of cases that should be produced. a. Fill in the payoff table (Using Excel - calculate profit for each combination of cases produced and cases demanded at the market.) Remember you cannot sell product that you don't have, on the other hand you cannot sell product if there is no demand for it Demand 30 10 20 40 Cases produced 10 20 30 40 Using the probabilities given: b. Calculate the EMV for each alternative order size. c. How many papers should be ordered if the EMV was used? d. Calculate the EV with PI and the EV of PI for this problem. e. How would you interpret the EV of PI? Ora's Organics is the name of a small family farm in western lowa that produces cases of vegetables for an outdoor market in Dubuque, Iowa. Each case costs $6.50 to produce and is sold for $15. If there are cases leftover when the market closes, they are given to a local food bank The potential demand levels and estimated probabilities are as follows: 10 cases, 0.15; 20 cases, 0.25; 30 cases, 0.40, 40 cases 0.20. Ora, the farm manager, wants to determine the number of cases that should be produced. a. Fill in the payoff table (Using Excel - calculate profit for each combination of cases produced and cases demanded at the market.) Remember you cannot sell product that you don't have, on the other hand you cannot sell product if there is no demand for it Demand 30 10 20 40 Cases produced 10 20 30 40 Using the probabilities given: b. Calculate the EMV for each alternative order size. c. How many papers should be ordered if the EMV was used? d. Calculate the EV with PI and the EV of PI for this problem. e. How would you interpret the EV of PI