The manager of
the greeting card section of Mazey’s department store is considering her order for
a particular line of Christmas cards. The cost of each box of cards is $3; each
box will be sold for $5 during the Christmas season. After Christmas, the cards
will be sold for $2 a box. The card section manager believes that all leftover
cards can be sold at that price. The estimated demand during the Christmas
season for the line of Christmas cards, with associated probabilities, is as
follows:
Demand (boxes) ……………. Probability
25
…………….. .10
26 …………….
.15
27 …………….
.30
28
……………. .20
29 …………….
.15
30
……………. .10
a. Develop the
payoff table for this decision situation.
b. Compute the
expected value for each alternative and identify the best decision.
c. Compute the
expected value of perfect information.
AND The other problem attach
