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The Steak and Chop Butcher Shop purchases steak from a local meatpacking house. The meat is purchased on Monday at $2.00 per pound, and the shop sells the steak for $3.00 per pound. Any steak left over at the end of the week is sold to a local zoo for $.50 per pound . The possible demands for steak and the probability of each are shown in the following table:
Demand (lb.) Probability20 .1021 .2022 .3023 .3024 .10 1.00
The shop must decide how much steak to order in a week. Using Excel, construct a payoff table for this decision situation and determine the amount of steak that should be ordered, using expected value.
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