Question: The Fish House (TFH) in Norfolk, Virginia, sells fresh fish and seafood. TFH receives daily shipments of farm—raised trout from a nearby supplier. Each trout costs $2.45 and is sold for $3.95. To maintain its reputation for freshness, at the end of the day TFH sells any leftover trout to a local pet food manufacturer for $1.25 each. The owner of TFH wants to determine how many trout to order each day. Historically, the daily demand for trout is:

1. Construct a payoff matrix for this problem.
2. What decision should be made according to the maximax decision rule?
3. What decision should be made according to the maximin decision rule?
4. What decision should be made according to the minimax regret decision rule?
5. What decision should be made according to the EMV decision rule?
6. What decision should be made according to the EOL decision rule?
7. How much should the owner of TFH be willing to pay to obtain a demand forecast that is 100% accurate?
8. Which decision rule would you recommend that TFH use in this case? Why?
9. Suppose that TFH receives a quantity discount that reduces the price to $2.25 per trout if it purchases 15 or more. How many trout would you recommend that TFH order each day in this case?

Price: $2.99

Solution: The downloadable solution consists of 6 pages
Deliverable: Word Document