are157-homework-3 - ARE 157 ANALYSIS FOR PRODUCTION...

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ARE 157 ANALYSIS FOR PRODUCTION MANAGEMENT Homework 3--0ue Monday, Nov. 17th, at start ofclass Fall 2008 M.Whitney (12) 1. At Luigi's, a cafe, the menu features a seafood pasta dish made with fresh scallops. Because the ingtedients are purchased fresh in the afternoon, the cafe must plan in advance how many servings ofthis dish will be prepared each evening. The dish sells for $22.40, and costs $5.60 to prepare. Any dinners that are not sold are discarded and bring in no revenue. Based on past sales experience, the fmn knows the probability ofserving various quantities ofthis dish is as follows: # ofdinners served P(d) P(O) <20 0 21 .10 22 .15 23 .15 24 .2 25 .15 26 .15 27 .05 28 .05 29 or more 0 a.. Find P(D), the probability of"stocking out", for each number ofdinners that is prepared. [Note: P(O) is the probability that demand will be greater than or equal to the number ofdinners prepared]. b. Calculate the expected profit or loss from the 21 st dinner, and the 28 th dinner. Now fmd the optimal probability ofstocking out. To maximize expected profit, how many dinners should be prepared each day? c.
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This note was uploaded on 03/31/2009 for the course ARE 157 taught by Professor Whitney during the Spring '08 term at UC Davis.

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are157-homework-3 - ARE 157 ANALYSIS FOR PRODUCTION...

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