Define min and max regret approach, Macroeconomics

The Red Lobster sells fresh seafood. Red Lobster receives daily shipments of farm-raised fish from a nearby supplier. Each fish cost $2.50 and is sold for $4.00. To maintain its reputation for freshness, at the end of the day Red Lobster sells any leftover fish to a local pet food manufacturer for$1.55 each. The owner of the Red Lobster wants to determine how many fish to order each day. Historically, the daily demand for fish is:

Demand

10

11

12

13

14

15

Probability

0.10

0.15

0.20

0.17

0.15

0.23

Construct the payoff table and answer the following:

(C-1) What decision should be made under the optimistic approach?

(C-2) What decision should be made under the min/max regret approach?

(C-3) What decision should be made under the expected value approach?

(C-4) How much should the owner of Red Lobster be willing to pay to obtain a demand forecast that is 100% accurate?

 

Posted Date: 3/19/2013 2:55:03 AM | Location : United States







Related Discussions:- Define min and max regret approach, Assignment Help, Ask Question on Define min and max regret approach, Get Answer, Expert's Help, Define min and max regret approach Discussions

Write discussion on Define min and max regret approach
Your posts are moderated
Related Questions
Who decides what goods services will be produced and sold in the US? Ans) It is mostly the American consumer. The US government also plays a big role in the nation's economy, co

Explain production as an income generating activity. What are the principal difference among government purchases of goods & service and transfer payments? Why are in

A brewery produces two kinds of beer, stout and IPA . Each batch of stout sells for $60 per unit while each batch of IPA sells for $108. Both products require malt, hops, barley, f

Suppose there is a simultaneous increase in the demand for diamonds and increase in the supply of diamonds. Which of the following will occur as a result of these simultaneous even

Suppose that between January 2011 and January 2012 the total number of people employed and the unemployment rate both fell. Briefly explain how this is possible. [2 marks]

State about the Other interest rates There are many other interest rates in a society. For example, you will earn interest when you deposit money in a bank account and you will

Classify each of the following as employed, unemployed, or not in the labor force. a. Beth is not working; she applied for a job at Wal-Mart last week and is awaiting the result

how can the central bank influence the size of the multiplier

If taxes and government expenditures were constant and did not vary with income, then: A. passive deficits would increase. B. structural deficits would increase. C. passive deficit

outline two main restrictions by indian government applied to import. Using the data from your case study analyse and explain who would benefit directly and who would lose directly