Company buys its merchandise for 10 and sells for each item

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Reference no: EM13470312

A company purchases its merchandise for $10 and sells for each item for $20. The pay-off table for the problem is given below.

	Demand for Item
Alternative	Low	Medium	High
Do nothing	0	0	0
Order Low	30,000	30,000	30,000
Order Medium	10,000	50,000	40,000
Order High	-10,000	40,000	80,000
Probability	0.3	0.3	0.4

What is the decision based on each of the following criteria?

(a) EMV approach

Reference no: EM13470312

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