One product that brilliant color supplies is bc 6

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photographic stores to process 35mm film. One product that Brilliant Color supplies is BC-6. JohnKubick, president of Brilliant Color, normally stocks 11, 12, or 13 cases of BC-6 each week. For eachcase that John sells, he receives a profit of $35. Like many photographic chemicals, BC-6 has a veryshort shelf life, so if a case is not sold by the end of the week, John must discard it. Since each casecosts John $56, he loses $56 for every case that is not sold by the end of the week. There is aprobability of 0.45 of selling 11 cases, a probability of 0.35 of selling 12 cases, and a probability of0.2 of selling 13 cases.(a) Construct a decision table for this problem. Include all conditional values and probabilities in thetable.(b) What is your recommended course of action?(c) If John is able to develop BC-6 with an ingredient that stabilizes it so that it no longer has to bediscarded, how would this change your recommended course of action?Solution:(a) We have the decision table as following:STOCKSTOCK SOLD11 cases12 cases13 cases11 cases12 cases13 casesProbability11*$35 = $38511*$35 – 1*$56 = $32911*$35 – 2*$56 = $273 0.4511*$35 = $38512*$35 = $42012*$35 – 1*$56 = $3640.3511*$35 = $38512*$35 = $42013*$35 = $4550.2(b) We have:EMV(11 cases)= (0.45)*($385) + (0.35)*($385) + (0.2)*($385) = $385EMV(12 cases)= (0.45)*($329) + (0.35)*($420) + (0.2)*($420) = $379.05EMV(13 cases)= (0.45)*($273) + (0.35)*($364) + (0.2)*($455) = $341.25Based on the Maximize Expected Monetary Value model, John should choose to sell 11 cases becauseit has the highest EMV.(c) If John is able to develop BC-6 with an ingredient that stabilizes it so that it no longer has to bediscarded, we have the decision table as following:STOCKSTOCK SOLD11 cases12 cases13 cases11 cases12 cases13 casesProbability11*$35 = $38511*$35 = $38511*$35 = $385 0.4511*$35 = $38512*$35 = $42012*$35 = $4200.3511*$35 = $38512*$35 = $42013*$35 = $4550.2We have:EMV(11 cases)= (0.45)*($385) + (0.35)*($385) + (0.2)*($385) = $385
LE ANH KHOA – BABAIU14124EMV(12 cases)= (0.45)*($385) + (0.35)*($420) + (0.2)*($420) = $404.25EMV(13 cases)= (0.45)*($385) + (0.35)*($420) + (0.2)*($455) = $411.25In this situation, based on the Maximize Expected Monetary Value model, John should choose to sell13 cases because it has the highest EMV.

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