What is emv and eol approach, Cost Accounting

Adele Weiss manages the campus flower shop. Flowers must be ordered three days in advance from her supplier in Mexico. Advance sales are so small that Weiss has no way to estimate the demand for the red roses. She buys roses for $15 per dozen and sells them for $40 per dozen. Pay-off table for the problem is given below.

 

Demand for Red Roses

Alternative

Low (25 dozen)

Medium (60 dozen)

High (130 dozen)

Do nothing

0

0

0

Order 25 dozen

300,000

300,000

300,000

Order 60 dozen

100,000

600,000

600,000

Order 130 dozen

-100,000

400,000

900,000

Probability

0.3

0.4

0.3

What is the decision based on each of the following criteria? Show work in making the decision for each criterion.

a)      EMV approach

b)      EOL approach

Use the tables given below.

a)      EMV Approach

 

Demand for Red Roses

 

Alternative

Low (25 dozen)

Medium (60 dozen)

High (130 dozen)

EMV

Do nothing

 

 

 

 

Order 25 dozen

 

 

 

 

Order 60 dozen

 

 

 

 

Order 130 dozen

 

 

 

 

Probability

0.3

0.4

0.3

 

b)      EOL Approach

 

Demand for Red Roses

 

Alternative

Low (25 dozen)

Medium (60 dozen)

High (130 dozen)

EOL

Do nothing

 

 

 

 

Order 25 dozen

 

 

 

 

Order 60 dozen

 

 

 

 

Order 130 dozen

 

 

 

 

Probability

0.3

0.4

0.3

 

Posted Date: 4/1/2013 5:46:03 AM | Location : United States







Related Discussions:- What is emv and eol approach, Assignment Help, Ask Question on What is emv and eol approach, Get Answer, Expert's Help, What is emv and eol approach Discussions

Write discussion on What is emv and eol approach
Your posts are moderated
Related Questions
The costs that are fixed irrespective of manufacture are fixed costs. EX: Rent, Depreciation. Fix cost is those cost who not alter in any time whether the production done or not

sir i want to know the whole procress of costing

Types of Standard Costs The standard cost set could be ideal, basic, attainable or current. i. Basic Standards: These are long term standards that would keep unchanged ov

Standard Cost A predetermined cost is representing the ideal or norm achievable through an organization. Standard costs form the basis of a standard cost system used extensivel

2. Blue-Jay Sporting Goods is a start-up company that expects to earn $3.00 per share next year. Since the firm currently retains 100 percent of earnings to finance future grow

These balances for a company x Raw materials $40,000 Work in process $30,000 Finished goods $60,000 for the current year the company estimated that it would work 150.000 mach

Amazing acrobatics performs acrobatics in stadiums around the world. The average show sells about 1,000 tickets at $60 per ticket. Each show requires a team of 45 highly trained sp

What is callable preferred stock? Why do corporations issue such stock? Given the different features that are associated with stock (callable, cumulative, preferred, etc.), what ty

Problem: A satellite is launched into Earth orbit by a Delta II launch vehicle (LV).  The Delta LV's engines do not perform as expected, and at upper-stage burnout the satellite

Cost Behaviour "Profitability is only around the corner." This is a general expression in the business world; you might have heard or said this yourself only. But, the reality