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2. A daily demand for loaves of bread at a grocery store is given by the fllowing probability distribution: 100 150 0.20 0.25 200 0.30 250 0.15 300 0.10 p(x) and the cost payoff matrix (in Rs) as: Daily Demand 100 150 200 250 350 100 300 300 300 300 300 150 250 450 450 450 450 200 200 400 600 600 600 250 150 350 550 750 750 350 | 100 300 500 700 900 i) Determine the best daily stock of loaves or bread using the expected monetary value (EMV) criterion. ii) Determine the best daily stock of loaves of bread using the expected opportunity loss (EOL) criterion. iii) How much will the decision maker spend to get additional information? Daily Stock

2. A daily demand for loaves of bread at a grocery store is given by the fllowing probability distribution: 100 150 0.20 0.25 200 0.30 250 0.15 300 0.10 p(x) and the cost payoff matrix (in Rs) as: Daily Demand 100 150 200 250 350 100 300 300 300 300 300 150 250 450 450 450 450 200 200 400 600 600 600 250 150 350 550 750 750 350 | 100 300 500 700 900 i) Determine the best daily stock of loaves or bread using the expected monetary value (EMV) criterion. ii) Determine the best daily stock of loaves of bread using the expected opportunity loss (EOL) criterion. iii) How much will the decision maker spend to get additional information? Daily Stock

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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2. A daily demand for loaves of bread at a grocery store is given by the following probability distribution: 100 150 0.20 0.25 200 0.30 250 0.15 300 0.10 p(x) and the cost payoff matrix (in Rs) as: Daily Demand 100 150 200 250 350 100 300 300 300 300 300 150 250 450 450 450 450 200 200 400 600 600 600 250 150 350 550 750 750 350 100 300 500 700 900 i) Determine the best daily stock of loaves of bread using the expected monetary value (EMV) criterion. ii) Determine the best daily stock of loaves of bread using the expected opportunity loss (EOL) criterion. i) How much will the decision maker spend to get additional information? Daily Stock
Transcribed Image Text:2. A daily demand for loaves of bread at a grocery store is given by the following probability distribution: 100 150 0.20 0.25 200 0.30 250 0.15 300 0.10 p(x) and the cost payoff matrix (in Rs) as: Daily Demand 100 150 200 250 350 100 300 300 300 300 300 150 250 450 450 450 450 200 200 400 600 600 600 250 150 350 550 750 750 350 100 300 500 700 900 i) Determine the best daily stock of loaves of bread using the expected monetary value (EMV) criterion. ii) Determine the best daily stock of loaves of bread using the expected opportunity loss (EOL) criterion. i) How much will the decision maker spend to get additional information? Daily Stock
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