1000 1 (30 points) Bay Sea Shop purchases fresh shrimp every day from local fish

Question

1000 1 (30 points) Bay Sea Shop purchases fresh shrimp every day from local fishermen for $6.00 per pound, and sells them for $12.00 per pound to a food processing firm. T respective probabilities of 0.2, 0.4, and 0.4 per pound. Any shrimp left unsold at the end of the day are sold for $4.00 he daily demand for shrimp is 50, 60, or 70 pounds, with a Construct the decision table, showing the states of nature, decision alternatives, payofts (pro probabilities. (Show 3 sample computations of Cis.on % cara Co Pioh

Explanation / Answer

1.

A.

Step 1 of the decision table with payoff (profit) is as follows:

Step 2 of the decision table with payoff (profit) is as follows:

State of Nature ( daily demand) Decision alternatives 50 60 70 50 (12-6)*50 - 0 (12-6)*50 (12-6)*50 60 (12-6)*50 +(4-6)*10 (12-6)*60 (12-6)*60 70 (12-6)*50 +(4-6)*20 (12-6)*60 +(4-6)*10 (12-6)*70 Probabilities 0.2 0.4 0.4

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