Demand Probability of demand
5 .10
8 .30 Cost per cake $11.00
15 .50 Sale price per cake $18.00
22 .10 Salvage value per cake $3.00
A) Using pay-off matrix find out the optimal strategy for stocking cakes each day to maximze profits in the long run
B) Using opportunity cost matrix determine the optimal strategy for stocking cakes each day so as to minimize the total actual cost or opportunity cost in the long run.
C) The probability of demand is not known. Using Hurwicz criterion, find the optimal strategy to stock cakes it the decision maker is 60% pessimist.
D) The probability distribution of demand is not known. What will be your best policy for stocking cakes using Laplace strategy