Demand Prob. Cumulative Incremental Prob. That Prob.

That Incremental Cumulative

Probability Decision incremental unit incremental unit Expected Expected
not needed needed Contribution Contribution
5 .10 .10
6 .20 .30 First .10 .90 80 80
7 .25 .55 Second .30 .70 60 140
8 .20 .75 Third .55 .45 35 175
9 .20 .95 Fourth .75 .25 15 190
10 .05 1.0 Fifth .95 .05 (5) 185

Gain 90
Loss 10

Revenue=EMV=190

Profit = Gain X Prob of Gain+(-Loss) X (Prob of Loss)

= 90*.90 + (-10)*(.10)
=80

Cr= g/g+n
=90/90+10
=0.9.

Decision Problem
90 200
80 180
70 160
60 140
Inremental
50 120
Cumulative
Axis Title 40 100
30 80
20 60
10 40
0 20
1 2 3 4 5 10
-10 0
 Cumugram

1
0.9
0.8
Cumulative Probabilty

0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
5 6 7 8 9 10