Question

In: Statistics and Probability

2. A city is hosting an annual marathon event and wants to produce t-shirts. Maria was...

2. A city is hosting an annual marathon event and wants to produce t-shirts. Maria was able to obtain previous years’ demand and probability data as given in below table. She also estimates:

Selling price is $10, cost is $3, and the salvage value is $1.

Calculate all numbers in the payoff table. Show all work. How many shirts should be made to maximize profit?

Demand = 1000, 20%

Demand = 2000, 30%

Demand = 3000, 30%

Demand = 4000, 20%

Profit

Make 1000

Make 2000

Make 3000

Make 4000

Solutions

Expert Solution

orchestra answered 1 year ago
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