On Thursday evening, the manager of a small branch of a car rental agency finds that he
Question:
On Thursday evening, the manager of a small branch of a car rental agency finds that he has available six cars for rental on the following day. However, he is able to request deliv ery of additional cars, at a cost of $20 each, from the regional depot. Each car that is rented produces an expected prolit of $40 (The cost of delivery of the car must be sub- tracted from this profit.) Each potential customer requesting a car when none is available is counted a $10 loss in goodwill. On reviewing his records for previous Fridays, the man- ager linds that the number of cars requested have ranged from six to ten: the percentages are shown in the accompanying table. The manager must decide how many cars, if any, to order from the regional depot.
(a) Set up the payoff table.
(b) If the expected monetary value criterion is used, how many cars should be ordered?
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