Minimize expected decision error costs

Assignment Help Business Economics
Reference no: EM131607455

Fashion Buyers

A buyer for a department store must decide on which designs the stores will carry before he knows what the demand will be in the coming season. Choosing a poorly demanded design means lots of unsold merchandise and losses that are $200,000 on average. Passing on a highly demanded design means lots of unsold merchandise and missing out on profits that are $300,000 on average. So long as he is more than 40% confident that the design will be successful, carrying the design will minimize expected decision error costs. Why might he opt to carry designs only if he is more than, say, 50% confident of success?

Reference no: EM131607455

Questions Cloud

Describe what social engineering is : Describe what social engineering is and explain its existence and prevalence.
Compare and contrast the operational and managerial impacts : Compare and contrast the operational and managerial impacts of the aggregate planning decisions in terms of customer satisfaction.
Quarter for the foreseeable future : They expect to repeat this process every quarter for the foreseeable future. Can they agree to ban the consultants?
Approximately what was the median income : Let P(x) be the cumulative distribution function for the household income distribution in the US in 2009.9 Values of P(x) are in the following table.
Minimize expected decision error costs : Why might he opt to carry designs only if he is more than, say, 50% confident of success?
Analyze any modern corporate setup : Analyze any modern corporate setup, you will see that companies want to ensure that all users are aware of their own individual responsibility.
What are your first impressions of the review : What are your first impressions of the review. Do you think it is a fair review. Why or why not
Explain how you will leave them wanting more : Compose a statement designed to make them care about what you do. Explain how you will leave them wanting more. Describe your call to action.
Find a formula for density function of given distribution : The distance is measured in Bohr radii. (1 Bohr radius = 5.29 × 10-11 m. Niels Bohr (1885-1962) was a Danish physicist.) For example, P(1) = 1 - 5e-2 ˜ 0.32.

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd