Palmer Jam Company is a small manufacturer of several different jam products. One product is an organic jam that has no preservatives, sold to retail outlets. Susan Palmer must decide how many cases of jam to manufacture each month. The probability that demand will be 7 cases is 0.10, for 8 cases it is 0.25, for 9 cases it is 0.45, and for 10 cases it is 0.20. The cost of every case is $50, and the price Susan gets for each case is $90. Unfortunately, any cases not sold by the end of the month are of no value as a result of spoilage. Based on the given information, Susan's conditional profits table for jam is: Demand 7 cases 8 cases 9 cases 10 cases Produce p=0.10 p=0.25 p=0.45 p=0.20 7 cases enter your response here enter your response here enter your response here enter your response here 8 cases enter your response here enter your response here enter your response here enter your response here 9 cases enter your response here enter your response here enter your response here enter your response here 10 cases enter your response here enter your response here enter your response here enter your response here The number of cases that Susan should produce to achieve maximum expected value (EMV) is _ cases. The EMV of stocking this number of cases is _ (round answer to the nearest whole number).
Palmer Jam Company is a small manufacturer of several different jam products. One product is an organic jam that has no preservatives, sold to retail outlets. Susan Palmer must decide how many cases of jam to manufacture each month. The probability that demand will be 7 cases is 0.10, for 8 cases it is 0.25, for 9 cases it is 0.45, and for 10 cases it is 0.20. The cost of every case is $50, and the price Susan gets for each case is $90. Unfortunately, any cases not sold by the end of the month are of no value as a result of spoilage. Based on the given information, Susan's conditional profits table for jam is: Demand 7 cases 8 cases 9 cases 10 cases Produce p=0.10 p=0.25 p=0.45 p=0.20 7 cases enter your response here enter your response here enter your response here enter your response here 8 cases enter your response here enter your response here enter your response here enter your response here 9 cases enter your response here enter your response here enter your response here enter your response here 10 cases enter your response here enter your response here enter your response here enter your response here The number of cases that Susan should produce to achieve maximum expected value (EMV) is _ cases. The EMV of stocking this number of cases is _ (round answer to the nearest whole number).
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter11: Simulation Models
Section: Chapter Questions
Problem 56P: A common decision is whether a company should buy equipment and produce a product in house or...
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Palmer Jam Company is a small manufacturer of several different jam products. One product is an organic jam that has no preservatives, sold to retail outlets. Susan Palmer must decide how many cases of jam to manufacture each month. The probability that demand will be 7 cases is 0.10, for 8 cases it is 0.25, for 9 cases it is 0.45, and for 10 cases it is 0.20. The cost of every case is $50, and the price Susan gets for each case is $90. Unfortunately, any cases not sold by the end of the month are of no value as a result of spoilage.
Based on the given information, Susan's conditional profits table for jam is:
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Demand
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7
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8
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9
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10
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Produce
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p=0.10
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p=0.25
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p=0.45
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p=0.20
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7
cases |
enter your response here
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enter your response here
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enter your response here
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enter your response here
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8
cases |
enter your response here
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enter your response here
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enter your response here
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enter your response here
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9
cases |
enter your response here
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enter your response here
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enter your response here
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enter your response here
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10
cases |
enter your response here
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enter your response here
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enter your response here
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enter your response here
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The number of cases that Susan should produce to achieve maximum expected value
(EMV) is _ cases.
The EMV of stocking this number of cases is _ (round answer to the nearest whole number).
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