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
what would your answer be to the following problem, please show detailed calculations: The XYZ Company manufacturers Part 123 for use in its production line. The manufacturering co

Peter Coffin and Paul Bearer own The Grave Undertaking, Inc. and their firm uses a predetermined overhead rate to apply overhead to the production of custom-built coffins.  They us

You are the CFO of a Hospital. Suppose that your projected average daily reimbursement is $100, 000 and your average collection day is 40 days. What is your hospital's annual cost

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4 Variable costs are those

the following information relates to process 3 of a three stage production process for the month of january 2014. opening inventury 300 units comlete as to; material from proces

what is overhead cost classfication of cost overhead


Costs and Revenue Cost of the development work done in-house to 1 January 2009 has been £1.5m with a further cost of £50,000 per month from now until the software is ready

Accrued liabilities show expenses or obligations incurred in the earlier accounting period but the payment for similar will be made in the subsequent period. In several cases where

A listed entity, had 3,000,000 $1 ordinary shares in issue, On 1 January 2009 CSA.CSA made a bonus issue of 1 for 3, On 1 May 2009. CSA issued 2,000,000 $1 ordinary shares for $3.2