Question: Can someone please explain to me what EPPI & EVPI is? Also, if there is a question limit just answer the last two items. PROBLEM
Can someone please explain to me what EPPI & EVPI is? Also, if there is a question limit just answer the last two items.
PROBLEM 2: The daily demand for loaves of bread in a grocery store can assume one of the following values: 100,120 , or 130 loaves with probabilities 0.2,0.3, and 0.5. The owner of the store is thus limiting her alternatives to stocking one of the indicated three levels. If the stocks are more than she can sell in the same day, she must dispose of the remaining loaves at a discount price of 55 cents/loaf. Assuming that she pays 60 cents per loaf and sells it for $1.05. a) Create the Payoff/Cost matrix for the problem b) Using Baye's Rule what would be the decision made? c) Find the expected profit using Perfect Information Source (EPPI). d) Find the expected value of perfect information (EVPI)
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