Question: Orders for clothing from a particular manufacturer for the Christmas Season must be placed in February. The cost per unit of a particular garment is $20 while the anticipated selling price will be $50. Anything not sold during the season can be sold for $15 to a discount store. Demand is the State of Nature and is projected to be either 50, 60, or 70 units. Therefore these three quantities will be the three alternatives. There is a 40 percent chance that demand will be 50 units, a 50 percent will demand will be 60 units, and a 10 percent chance demand will be 70 units.

If the company decides to use the EMV criterion, which of the alternatives should be chosen.

Construct a Decision Table (in the space below) and show EMV for each alternative.

Price: $2.99

Solution: The downloadable solution consists of 1 pages
Deliverable: Word Document