Compute the expected value of every alternative number

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Reference no: EM1373345

Q. The Palm Garden Greenhouse specializes in raising carnations which are sold to florists. Carnations are sold for $3.00 per dozen; the cost of growing the carnations also distributing them to the florists is $2.00 per dozen. Any carnations left at the end of the day are sold to local restaurants also hotels for $0.75 per dozen. The estimated cost of customer ill will if demand is not met is $1.00 per dozen. The expected daily demand (in dozens) for the carnations is as follows:
Daily Demand Probability
20 0.05
22 0.10
24 0.25
26 0.30
28 0.20
30 0.10
1.00

a) Develop the payoff table for this decision situation.

b) Compute the expected value of every alternative number of (dozens of) carnations which could be stocked also select the best decision.

c) Construct the opportunity loss table also determine the best decision.

d) Compute the expected value of perfect information.

Reference no: EM1373345

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