Jumbo James sells hotdogs out of a cart for $3.00 each.His cost to purchase and prepare the hotdog is $1.15 each.He 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 hot dogs.On any weekday, the demand for hot dogs and the probability of selling them is estimated as follows:

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

Question

Jumbo James sells hotdogs out of a cart for $3.00 each.His cost to purchase and prepare the hotdog is $1.15 each.He 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 hot dogs.On any weekday, the demand for hot dogs and the probability of selling them is estimated as follows:

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

Quizplus · Accepted Answer

The Answer of Jumbo James sells hotdogs out of a cart for $3.00 each.His cost to purchase and prepare the hotdog is $1.15 each.He 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 hot dogs.On any weekday, the demand for hot dogs and the probability of selling them is estimated as follows: a.Determine the expected value if Jumbo James stocks 200 hot dogs every day. b.Determine the expected value if Jumbo James decides to stock 150 hot dogs every day.

Jumbo James Sells Hotdogs Out of a Cart for $3