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
Determine the Gross domestic product Gross domestic product is the total value of an economy's domestic output of goods and services. Gross national product is the similar as

#“Nominal GDP declined between 2008 and 2009, therefore the GDP deflator must also have declined.”

Function given: Qt=A0Lt^6Kt^4, Lt=L0e^.03t, Kt=K0e^.02t 1. Growth of labor is continuously compounded at 3% 2. Growth of Capital is continuously compounded at 2% Solve:

The demand for money schedule shows that the quality of money that people want to hold

In 1999 Mercedes-Benz USA adopted a new pricing policy, which it called NFP (negotiation-free process), that sought to eliminate price negotiations between customers and new-car de

In the heckscherohlin model, a decrease in the factors of production required to produce rice and beans would: a. shift the production possibilities frontier for rice and beans

Unemployment classification Economists sometimes differentiate between different types of unemployment. There are many type of ways of classifying unemployment however the foll

.Clearly explain how net foreign investment links the market for loanable funds and the market for foreign currency exchange. Make sure you define net foreign investment in your an

Q. Classical model and the long-term Phillips curve? In classical model, L and real wage are determined from equilibrium conditions in the labor market. L and W/P, hence, are o

1. An innovator, who creates new products and new ways to get business done, is referred to as: Select one: a. A manager. b. A capitalist. c. An entrepreneur. d. A creditor. 2