6. Ah Seng Coffeeshop needs to decide in November 2021 how many Chinese New Year cups toorder to sell at his coffeeshop. Because the cups are specially made for the year 2022 (year of thetiger), those that are unsold by end of February 2022 are considered a loss. These specially-designed cups sell for $23.95 and cost $6.75 each. Ah Seng is uncertain of the demand. He believesthat there is a 25% chance that they will sell 10,000 cups, a 50% chance that they will sell 15,000and a 25% chance that they will sell 20,000.a) Construct decision tree and cumulative risk profiles for the problem above using Precision Treeb) Now, assume that any unsold cups are discounted and can be sold for $5 after February 2022.How does this affect the decision?

given, designed cups sell = $23.95 cost = $6.75 chances of 25% sell 10,000 cups 50% chance sell…

Answered: 6. Ah Seng Coffeeshop needs to decide…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 40P

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