Define min and max regret approach, Macroeconomics

Assignment Help:

The Red Lobster sells fresh seafood. Red Lobster receives daily shipments of farm-raised fish from a nearby supplier. Each fish cost $2.50 and is sold for $4.00. To maintain its reputation for freshness, at the end of the day Red Lobster sells any leftover fish to a local pet food manufacturer for$1.55 each. The owner of the Red Lobster wants to determine how many fish to order each day. Historically, the daily demand for fish is:

Demand

10

11

12

13

14

15

Probability

0.10

0.15

0.20

0.17

0.15

0.23

Construct the payoff table and answer the following:

(C-1) What decision should be made under the optimistic approach?

(C-2) What decision should be made under the min/max regret approach?

(C-3) What decision should be made under the expected value approach?

(C-4) How much should the owner of Red Lobster be willing to pay to obtain a demand forecast that is 100% accurate?

 


Related Discussions:- Define min and max regret approach

Produce schematic-block and simplified diagram , An antenna shown in Figur...

An antenna shown in Figure is to be adjusted from its current position to a new desired position by turning a potentiometer at an angle θ i (t) . The potentiometer converts the an

Income and substitution effects of a price change, Income and Substitution ...

Income and Substitution Effects of a Price Change Indifference curve analysis can be used to separate the income effect (IE) from substitution effect (SE). This is shown in Fig

Majority of the citizenry pays, Can democracy survive if a majority of the ...

Can democracy survive if a majority of the citizenry pays little or nothing in taxes while benefiting directly from a higher level of government spending? Why or why not?

Develop the null and alternative hypotheses, Because of high production-cha...

Because of high production-changeover time and costs, a director of manufacturing must convince management that a proposed manufacturing method reduces costs before the new method

New equilibrium price and equilibrium quantity, If demand increases and the...

If demand increases and the supply increases also, then what will happen to the new equilibrium price and equilibrium quantity? Explain what is happening with the curves and how pr

Should US laws be changed to require a shorter work week and, One constrain...

One constraint in our economy is time. As a society, we make choices about the allocation of time between work and other pursuits. In the US, most workers are eligible for overtime

Explain the economy automatic stabiliser, Explain the economy automatic sta...

Explain the economy automatic stabiliser A budget deficit is shortfall between a government's tax revenue and its spending in a given year. If a government runs a budget defici

Evaluating legal prices, Evaluating Legal Prices: Collect information regar...

Evaluating Legal Prices: Collect information regarding the minimum wage. State the procedure of this legal price, assess its impact on the market for labor, and evaluate the extent

Write Your Message!

Captcha
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