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Zade runs a small flower shop. For this she has to order flowers every day. Orders for the flower bunches must be placed in quantities
- Zade runs a small flower shop. For this she has to order flowers every day. Orders for the flower bunches must be placed in quantities of twenty (20). The cost per bunch is Rs 70 if they order 20, Rs 67 if they order 40, Rs 65 if they order 60, and Rs 64 if they order 80. One bunch of flowers would be sold at Rs 120 each. Any bunch left over at the end of the day can be sold at Rs 40 each, next morning. If Zade runs out of flower bunches, she will miss on the good will of the customer and she estimates the loss to be Rs 6 per bunch. Zade estimates that the demand for flower bunches would be 10, 20, 50, or 80 with probabilities of 0.1, 0.4, 0.5, and 0.2 respectively. Draw a decision tree for the above scenario.
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