Downtown Health Clinic needs to order influenza vaccines for the next flu season. The Clinic charges its patients $16.00 per vaccination and each dose of vaccine costs the clinic $4.00 to purchase. The Center for Disease Control has a long standing policy of buying back unused vaccines for $1.00 per dose. The Clinic estimates the following probability distribution for the season's demand. Demand Probability 1,000 2,000 0.04 0.20 3,000 4,000 5,000 0.23 0.40 0.13

Downtown Health Clinic needs to order influenza vaccines for the next flu season. The Clinic charges its patients $16.00 per vaccination and each dose of vaccine costs the clinic $4.00 to purchase. The Center for Disease Control has a long standing policy of buying back unused vaccines for $1.00 per dose. The Clinic estimates the following probability distribution for the season's demand. Demand Probability 1,000 2,000 0.04 0.20 3,000 4,000 5,000 0.23 0.40 0.13

Name: A. How many vaccines should the Clinic order to maximize its expected
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Description: A. How many vaccines should the Clinic order to maximize its expected profit?The Clinic should order (x) vaccines because it yields the maximum expected profit of $(x). Downtown Health Clinic needs to order influenza vaccines for the next flu seaso

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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Downtown Health Clinic needs to order influenza vaccinesfor the next flu season. The Clinic charges its patients $15.00per vaccination and each dose of vaccine costs the clinic$4.00 to purchase. The Center for Disease Control has a longstanding policy of buying back unused vaccines for $1.00 perdose. The Clinic estimates the following probability distribu-tion for the season’s demand:Demand Probability2,000 0.053,000 0.204,000 0.255,000 0.406,000 0.10 a. How many vaccines should the Clinic order to maximizeits expected profit?b. The Clinic is trying to determine if they should participatein a new Federal program in which the cost of each dose isreduced to $2.00. However, to participate in the program,they can charge no more than $10.00 per vaccine. Onstrictly a profit maximizing basis, should the Clinic agreeto participate?
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Downtown Health Clinic needs to order influenza vaccines for the next flu season. The Clinic charges its patients $15.00 per vaccination and each dose of vaccine costs the clinic $4.00 to purchase. The Center for Disease Control has a long standing policy of buying back unused vaccines for $1.00 per dose. The Clinic estimates the following probability distribution for the season’s demand:Demand Probability2,000 0.053,000 0.204,000 0.255,000 0.406,000 0.10a. How many vaccines should the Clinic order to maximize its expected profit?b. The Clinic is trying to determine if they should participate in a new Federal program in which the cost of each dose is reduced to $2.00. However, to participate in the program, they can charge no more than $10.00 per vaccine. On strictly a profit maximizing basis, should the Clinic agree to participate?
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