Jumbo James sells hotdogs out of a cart for $3.00 each. The cost to purchase and prepare the hotdog is $1.15 each. James operates the small business with very few capital assets and has no place to store unsold hotdogs. For this reason, every evening he sells the unsold hotdogs to a local homeless shelter for $0.50 each. Jumbo James will choose one of the following options as a standard stocking plan: d₁= 100; d₂ = 150; or d₃ = 200 hotdogs. On any weekday, the demand for hotdogs and the probability of selling them is estimated as follows:
$\begin{array}{ll}\text { Demand Per Day }&\text { Probability }\\100 & 0.50 \\200 & 0.30 \\300 & 0.20\end{array}$
a. Determine the expected value if Jumbo James stocks 200 hotdogs every day.
b. Determine the expected value if Jumbo James decides to stock 150 hotdogs every day.

Question

Jumbo James sells hotdogs out of a cart for $3.00 each. The cost to purchase and prepare the hotdog is $1.15 each. James operates the small business with very few capital assets and has no place to store unsold hotdogs. For this reason, every evening he sells the unsold hotdogs to a local homeless shelter for $0.50 each. Jumbo James will choose one of the following options as a standard stocking plan: d₁= 100; d₂ = 150; or d₃ = 200 hotdogs. On any weekday, the demand for hotdogs and the probability of selling them is estimated as follows:

\begin{array}{ll}\text { Demand Per Day }&\text { Probability }\\100 & 0.50 \\200 & 0.30 \\300 & 0.20\end{array}

a. Determine the expected value if Jumbo James stocks 200 hotdogs every day.
b. Determine the expected value if Jumbo James decides to stock 150 hotdogs every day.

Quizplus · Accepted Answer

The Answer of Jumbo James sells hotdogs out of a cart for $3.00 each. The cost to purchase and prepare the hotdog is $1.15 each. James operates the small business with very few capital assets and has no place to store unsold hotdogs. For this reason, every evening he sells the unsold hotdogs to a local homeless shelter for $0.50 each. Jumbo James will choose one of the following options as a standard stocking plan: d₁= 100; d₂ = 150; or d₃ = 200 hotdogs. On any weekday, the demand for hotdogs and the probability of selling them is estimated as follows: $\begin{array}{ll}\text { Demand Per Day }&\text { Probability }\ 100 & 0.50 \ 200 & 0.30 \ 300 & 0.20 \end{array}$ a. Determine the expected value if Jumbo James stocks 200 hotdogs every day. b. Determine the expected value if Jumbo James decides to stock 150 hotdogs every day.

Jumbo James Sells Hotdogs Out of a Cart for $3 Demand Per Day Probability 1000.502000.303000.20\begin{array}{ll}\text { Demand Per Day }&\text { Probability }\\100 & 0.50 \\200 & 0.30 \\300 & 0.20\end{array} Demand Per Day 100200300​ Probability 0.500.300.20​

Jumbo James Sells Hotdogs Out of a Cart for $3 $\begin{array}{ll}\text { Demand Per Day }&\text { Probability }\\100 & 0.50 \\200 & 0.30 \\300 & 0.20\end{array}$