Question: A) A grocery store manager must decide how many crates of bananas to purchase for the upcoming week. Each crate holds 250 pounds of bananas

A) A grocery store manager must decide how many crates of bananas to purchase for the upcoming week. Each crate holds 250 pounds of bananas and costs $75. The bananas sell for $0.49 per pound and by the end of the week any unsold bananas must be thrown away. Over the last eight weeks, demand has been 200 pounds once, 400 pounds twice, 600 pounds three times, and 800 pounds twice. According to expected value, should the manager purchase one, two or three crates of bananas? Reconsider problem A) we assumed that unmet demand had a $0 cost; in other words, if customers did not get what they wanted, it didn't cost us anything and it would not affect the customers' future behavior and spending. For example, if we only supplied 250 pounds of bananas and demand was 400 , then there was 150 units of unmet demand. This is probably not accurate. Not meeting customer demand is bad for business and certainly costs something in the long run. When we first solved this, supplying 2 crates, 500 pounds, had the highest expected value and was the "best" choice whereas supplying 3 crates, 750 pounds, had the lowest expected value and was the "worst" choice. At what cost per one unit of unmet demand does the "best" choice switch from 2 crates to 3 crates? In other words, what price would you have to put on unmet demand (per unit) that you would start supplying 3 crates instead of 2 crates
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