Andrew Thomas, a sandwich vendor at hard rock café annual rockfest, created a table of conditional values for the various alternatives (stocking decision) and state of nature (size of crowd)
Andrew Thomas, a sandwich vendor at hard rock café annual rockfest, created a table of conditional values for the various alternatives (stocking decision) and state of nature (size of crowd)
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter10: Introduction To Simulation Modeling
Section10.5: Introduction To @risk
Problem 20P: Use @RISK to analyze the sweatshirt situation in Problem 14 of the previous section. Do this for the...
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Transcribed Image Text:Andrew Thomas, a sandwich vendor at hard rock café annual rockfest, created a table of
conditional values for the various alternatives (stocking decision) and state of nature (size of crowd)
Alternatives
Large stock
average stock
small stock
probabilities associated with states of nature are
Big
Big
35000
20000
10500
0.3
State of nature (demand)
Average
Small
15000
10000
8000
Average
0.5
determine the alternative that gives Andrew the greatest expected monetary value (EMV)
compute the extpected value of perfect information (EVPI).
Small
-3000
5000
3000
0.2
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