What do you recommend to maximize the expected profit

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Reference no: EM131432976

FarmCo produces case of bananas. Each ease costs $7 and sells for $14. Based on their historical data, daily demand for banana was realized as 300 cases or -100 cases or 500 cases. If there are any cases not sold by the end of the day, they are sold to a food processing company for $5 a case. The probability that daily demand will be 300 cases is 0.35. the probability that daily demand will be -100 cases is 0.40, and the probability that daily demand will be 500 cases is 0.25. There is no cast when FarmCo does not satisfy customer demands.

1. Construct a decision table for this problem.

2. What do you recommend to maximize the expected profit?

Reference no: EM131432976

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