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  • (B) in Order To Maximize The Daily Profits, 40 Cakes Should Be Supplied

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    Azeez
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    The document shows a table with the probability, demand, supply and expected value of cakes. It calculates the expected value for supplying 20, 40 and 60 cakes. The expected value is highest at 40 cakes, so the conclusion is that supplying 40 cakes daily would maximize profits.

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    Chapter 9

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    The document shows a table with the probability, demand, supply and expected value of cakes. It calculates the expected value for supplying 20, 40 and 60 cakes. The expected value is highest at 40 cakes, so the conclusion is that supplying 40 cakes daily would maximize profits.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    16 views1 page

    (B) in Order To Maximize The Daily Profits, 40 Cakes Should Be Supplied

    Uploaded by

    Azeez
    The document shows a table with the probability, demand, supply and expected value of cakes. It calculates the expected value for supplying 20, 40 and 60 cakes. The expected value is highest at 40 cakes, so the conclusion is that supplying 40 cakes daily would maximize profits.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as docx, pdf, or txt
    of 1

    Supply of cakes

    Probability 20 40 60

    0.3 20 400 200 0


    [(20x20)- [(20x20)-
    (20x10)] (40x10)]
    0.5 Demand 40 400 800 600
    of cakes (20x40) [(40x20)-
    (20x10)]
    0.2 60 400 800 1200
    (60x20)

    EV 400 620 540


    [(400*0.3)+(400*0.5)+(400*0.2) (200*0.3)+(800*0.5)+(800*0.2) (0*0.3)+(600*0.5)+(1200*0.2)

    (b) In order to maximize the daily profits, 40 cakes should be supplied.

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