The owner of the clothing store must decide how many men's shirts to order for the...

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The owner of the clothing store must decide how many men's shirts to order for the new season. For a particular type of shirt, he must order in quantities of 100 shirts. If he orders 100 shirts, his cost is 10 TL per shirt; if he orders 200 shirts, his cost is 9 TL per shirt. His selling price for the shirt is 12 TL, but if any are left unsold at the end of the season, they will be sold in his famous 'half price-end of the season sale. For the sake of simplicity, he is willing to assume that the demand for this type of shirt will be either 100, 200, 300. Furthermore, he must place his order today for entire season; he can not wait to see how the demand is running for this type of shirt. (a) Construct a payoff table and eleminate any inadmissable action if there is. (20 points) (b) Find the best actions according to the maximin rule criteria. (10 points) (c) If the probabilities (occurrence chances) of each state of the world for the problem are equal, calculate the expected payoff value of each action and find the best action according to this criteria. (20 points) The owner of the clothing store must decide how many men's shirts to order for the new season. For a particular type of shirt, he must order in quantities of 100 shirts. If he orders 100 shirts, his cost is 10 TL per shirt; if he orders 200 shirts, his cost is 9 TL per shirt. His selling price for the shirt is 12 TL, but if any are left unsold at the end of the season, they will be sold in his famous 'half price-end of the season sale. For the sake of simplicity, he is willing to assume that the demand for this type of shirt will be either 100, 200, 300. Furthermore, he must place his order today for entire season; he can not wait to see how the demand is running for this type of shirt. (a) Construct a payoff table and eleminate any inadmissable action if there is. (20 points) (b) Find the best actions according to the maximin rule criteria. (10 points) (c) If the probabilities (occurrence chances) of each state of the world for the problem are equal, calculate the expected payoff value of each action and find the best action according to this criteria. (20 points)

Answer rating: 100% (QA)

a Payoff Table Demand Order 100 Order 200 100 200 100 200 100 200 300 100 0 Inadmissible action Orde... View the full answer