Question: A building contractor must decide how many mountain cabins to build in the ski resort area of Chickoh- pee. He builds each cabin at a
A building contractor must decide how many mountain cabins to build in the ski resort area of Chickoh- pee. He builds each cabin at a cost of $26,000 and sells each for $33,000. All cabins unsold after 10 months will be sold to a local investor for $20,000. The contractor believes that the demand for cabins follows a Poisson distribution, with a mean of .5. He assumes that any probability less than .01 can be treated as 0. Construct the payoff table and the opportunity loss table for this decision problem.
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