Demand (units) |
Probability |
0 |
5% |
100 |
20% |
200 |
40% |
300 |
25% |
400 |
10% |
TABLE SHOWING DEMAND FOR ONE DAY
demand (units) | probability | approx demand |
0 | 5% | 0 |
100 | 20% | 20 |
200 | 40% | 80 |
300 | 25% | 75 |
400 | 10% | 40 |
total | 215 |
Big boat should purchase 215 lilies to earn maximum daily income.
b) As maximum demand in a day can be 400 and not more than that, cost he can pay must not be greater than that.
Cost = $.4 x 400 = $160
Therefore, maximum amount of money that Big Boat Flowers should be willing to pay for an information system that reveals the exact demand for the day is $160.
Each day, Big Boat Flowers, a floral retailer, stocks fresh-cut calla lilies. Each flower costs $0.40...
4. Each day, Big Boat Flowers, a floral retailer, stocks fresh-cut calla lilies. Each flower costs $0.40 and sells for $00. Big Boat Flowers never reduces the selling price. At the end of each day, any unsold calla lilies are given to a nearby church. Big Boat Flowers estimates daily demand characteristics as follows: Demand (units) Probability 0 5% 100 20% 200 40% 300 25% 400 10% How many calla lilies should Big Boat Flowers purchase each day to maximize...