Beth Perry purchases strawberries for $3 a case and sells them for $8 a case. The...
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Beth Perry purchases strawberries for $3 a case and sells them for $8 a case. The rather high markup reflects the perishability of the item and the great risk of stocking it; the product has no value after the first day it is offered for sale. Beth Perry faces the problem of how many to order today for tomorrow" business. A 90-day observation of past sales gives the information below. There are only four possible values for sales volume. We assume Beth has no reason to believe that sales volume will behave differently in the future. Daily Sales (cases) No. of days sold 10 18 11 12 13 36 27 9. Total 90 Questions: 1. How many cases should Beth order to maximize her profits? 2. What is the expected monetary value of the various courses of action? 3. What is the value of perfect information in this case? 4. What is the expected opportunity loss of the various options? Beth Perry purchases strawberries for $3 a case and sells them for $8 a case. The rather high markup reflects the perishability of the item and the great risk of stocking it; the product has no value after the first day it is offered for sale. Beth Perry faces the problem of how many to order today for tomorrow" business. A 90-day observation of past sales gives the information below. There are only four possible values for sales volume. We assume Beth has no reason to believe that sales volume will behave differently in the future. Daily Sales (cases) No. of days sold 10 18 11 12 13 36 27 9. Total 90 Questions: 1. How many cases should Beth order to maximize her profits? 2. What is the expected monetary value of the various courses of action? 3. What is the value of perfect information in this case? 4. What is the expected opportunity loss of the various options?
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states of nature10 11 12 13 courses of action10 11 12 13 probabilities for the states of nature P101... View the full answer
Related Book For
College Accounting Chapters 1-30
ISBN: 978-0077862398
14th edition
Authors: John Price, M. David Haddock, Michael Farina
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