is an EXCEL SUBMISSION
From your textbook, Statistics for Management and Economics,
complete the following exercises:
“Decision Analysis”: Exercises 22.11
owner of a clothing store must decide how many men’s shirts to order for the
new season. For a particular type of shirt, she must order in quantities of 100
shirts. If she orders 100 shirts, her cost is $10 per shirt; if she orders 200
shirts, her cost is $9 per shirt; and if she orders 300 or more shirts, her
cost is $8.50 per shirt. Her selling price for the shirt is $12, but any shirts
that remain unsold at the end of the season are sold at her famous â€œhalf-price,
end-of-season sale.â€ For the sake of simplicity, she is willing to assume that
the demand for this type of shirt will be 100, 150, 200, or 250 shirts. Of
course, she cannot sell more shirts than she stocks. She is also willing to
assume that she will suffer no loss of goodwill among her customers if she
understocks and the customers cannot buy all the shirts they want. Furthermore,
she must place her order today for the entire season; she cannot wait to see
how the demand is running for this type of shirt.
the payoff table to help the owner decide how many shirts to order.
up the opportunity loss table.
the decision tree.