Decision making and expected values

Reference no: EM1390841

FINRA is considering three alternatives for providing food services (breakfast and lunch) to its employees: creating a company owned food service and hiring its own staff, hiring an outside vendor to provide food services (outsourcing), or a combination of hiring its own staff and outsourcing. The cost of providing food services depends on future demand. The annual cost of each option (thousands of dollars) depends on demand as follows:

Demand

Staffing Options High Medium Low

Hiring Own Staff 1300 1000 975

Outside Vendor 900 600 300

Combination 800 650 500

If the demand probabilities are 0.1, 0.5, and 0.4, which decision alternative will minimize the expected cost of providing food services for the staff? What is the expected annual cost associated with that recommendation?

Reference no: EM1390841

Questions Cloud

What is the mass of the liquid in the vat : What is the mass of the liquid in the vat.

Explain how does the ucc define a sale : The applicable statute is expressly limited to goods sold in California. Monaco argued which this RV had been sold in Nevada. Explain how does the UCC define a sale?

What is the project duration : What is the project duration (in weeks)? What is the slack (in weeks) associated with any and all noncritical paths through the project?

Lp problem using the corner point graphical method : Solve the following LP problem using the corner point graphical method. At the optimal solution, calculate the slack for each constraints

Decision making and expected values : FINRA is considering three alternatives for providing food services (breakfast and lunch) to its employees: creating a company owned food service and hiring its own staff, hiring an outside vendor to provide food services (outsourcing), or a combi..

Did dunkin'' donuts act faith in its relationship with peter : Peter filed a suit in a federal district court against Dunkin' Donuts and others. The defendants filed a motion for summary judgment. Did Dunkin' Donuts act in good faith in its relationship with Peter? Explain.

Determining the force of the person : A 75 kg person escapes from a burning building by jumping from a window 25-m above a catching net. Assuming that air resistance exerts a 95-N force on the person all through the fall, determine out the person's velocity just before hitting the net..

What is the lumberjacks speed relative to the shore : what is the lumberjack's speed relative to the shore? Neglect friction between the log and the water.

Nuclear protein - nucleoplasmin : Nucleoplasmin is a nuclear protein. Protein was divided into two segments and linked to the same large cytoplasmic protein, generating two fusion proteins

User Account

All Pages