Use this information to answer the following questions.
A bakery must decide how many pies to prepare for the upcoming weekend.The bakery has the option to make 50,100,or 150 pies.Assume that demand for the pies can be 50,100,or 150.Each pie costs $5 to make and sells for $7.Unsold pies are donated to a nearby charity center.Assume that there is no opportunity cost for lost sales.
-Refer to the information above.Assume that based on historical bids with the defense contractor,the plant manager believes that there is a 65% chance that the bid will be accepted and a 35% chance that the bid will be rejected.
a.Develop a decision tree for this problem.
b.Analyze the decision tree and determine which alternative should be chosen.
c.Using the expected opportunity loss (EOL)criterion,which alternative should be chosen?

Question

Quizplus · Accepted Answer

The Answer of Use this information to answer the following questions.
A bakery must decide how many pies to prepare for the upcoming weekend.The bakery has the option to make 50,100,or 150 pies.Assume that demand for the pies can be 50,100,or 150.Each pie costs $5 to make and sells for $7.Unsold pies are donated to a nearby charity center.Assume that there is no opportunity cost for lost sales.
-Refer to the information above.Assume that based on historical bids with the defense contractor,the plant manager believes that there is a 65% chance that the bid will be accepted and a 35% chance that the bid will be rejected.
a.Develop a decision tree for this problem.
b.Analyze the decision tree and determine which alternative should be chosen.
c.Using the expected opportunity loss (EOL)criterion,which alternative should be chosen?

Use This Information to Answer the Following Questions