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Posted: March 16th, 2022
Lidet EtFruit is a small private firm working
Lidet EtFruit is a small private firm working on the marketing of several farm produces with red palm fruit on top of its retail priorities
Lidet EtFruit is a small private firm working on the marketing of several farm produces with red palm fruit on top of its retail priorities
Lidet EtFruit is a small private firm working on the marketing of several farm produces with red palm fruit on top of its retail priorities. Even though it is required by many business customers throughout the year, its demand is documented to be on its peak during the Ramadan fasting season. Lidet Etfruit is contemplating to aquire the fruit from its loyal and dependable supplier, Dalol Fruits Farming SC., operating in Afar region. Lidet Etfruit is well informed that the fruits must be ordered three days in advance from its supplier in order to obtain the amount it requires. Although Ramadan is fast-approaching sales are almost entirely eleventh-hour, impulse purchases. Advance sales are so small that the firm has no way to estimate the probability of low (25 kg), medium (60 kg), or high (130 kg) demand for red palm fruits on the day of Ramadan. The firm buys the fruits for $15/kg and sells them for $40/kg. Considering the information given above, do the following:
a. Construct a payoff table for the problem
b. Which decision is indicated by each of the following decision criteria?
• Maximax
• Maximin
• Minimax regret
• The Hurwicz criterion (assume a=0.6)
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