A milk salesman estimates the probability of the demand for a litre of milk is as follows: Demand 11 12 13 14 15 Probability 0.10 0.15 0.30 0.25 0.20…
2080 · Solved Question with Answer
A milk salesman estimates the probability of the demand for a litre of milk is as follows:
| Demand | 11 | 12 | 13 | 14 | 15 |
|---|---|---|---|---|---|
| Probability | 0.10 | 0.15 | 0.30 | 0.25 | 0.20 |
He purchases a litre of milk @ of Rs. 60 and sells it @ of Rs. 70. Assuming that unsold milk has no scrap value, find
(a) Find optimum quantity that would obtain Max. EMV.
(b) Find the minimum value of EOL.
(c) What is the value of expected profit with perfect information (EPPI)?