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
Will the Euro survives? 1. Why are Greece, Ireland, Italy, Portugal, and Spain sometimes referred to as the euros zones "peripheral countries"? 2. Why did the European commis

State the both -Cyclical and Classical unemployment Cyclical unemployment Unemployment because of a recession. Classical unemployment Unemployment because of

A stock investor would like to have an idea concerning the average return of stocks that are traded on a certain exchange. In a sample of 99 stocks, the average return was 9 percen

Suppose Zippy's Banana Juice can produce according the following long-run production function. Q = 5 L 2 + 20 K - 0.4 K 2 where Q is gallons of juice per hour, L is labor hours,

Define the monopoly of Central banks The central bank has a monopoly on issuing currency, it is in complete control of the monetary base. In section 7.4.2 we will describe exac

Trends of Trade Shares: India's share in total world exports in 1950 was 1.85 percent and the share in total world imports was 1.7 1 percent. The share of both exports and imp


Derivation of Indifference Curve: Consider any commodity bundle denoted by point A in the above figure which consist x 0 1  and x 0 2 amount of good I and good II respectiv

Which of the following statements BEST describes the Metzler paradox? a. Tariffs improve the imposing nation's terms of trade. b. Export subsidies hinder the imposing nation's term

Gross Domestic Savings  Income not devoted to current consumption is saved. In an economy during a particular year some units will consume less than their income while some wil