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1

The national sales manager for Haynes T-shirts supplies all salespersons with the payoff table shown below, showing the potential profit generated when a retailer purchases from 1 to 4 dozen T-shirts, as well as an opportunity loss table. The table also shows the probability of demand for each state of nature.

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073401765/663702/C20_img1.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (27.0K)</a>

What is the expected payoff for purchasing 1 dozen T-shirts?
A)0
B)96
C)120
D)144
2

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What is the expected payoff for purchasing 2 dozen T-shirts?
A)0
B)96
C)120
D)144
3

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073401765/663702/C20_img1.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (27.0K)</a>

What is the expected payoff for purchasing 3 dozen T-shirts?
A)0
B)96
C)120
D)144
4

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073401765/663702/C20_img1.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (27.0K)</a>

How many dozen T-shirts should be purchased to yield the highest expected payoff?
A)1
B)2
C)3
D)4
5

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073401765/663702/C20_img1.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (27.0K)</a>

What is the expected opportunity loss for purchasing 1 dozen T-shirts?
A)96
B)120
C)144
D)240
6

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073401765/663702/C20_img1.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (27.0K)</a>

What is the expected opportunity loss for purchasing 3 dozen T-shirts?
A)96
B)120
C)144
D)240
7

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073401765/663702/C20_img1.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (27.0K)</a>

How many dozen T-shirts should be purchased to minimize the expected opportunity loss?
A)1
B)2
C)3
D)4
8

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073401765/663702/C20_img1.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (27.0K)</a>

What is the maximum expected payoff under conditions of certainty?
A)96
B)120
C)144
D)240
9

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073401765/663702/C20_img1.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (27.0K)</a>

What is the value of perfect information?
A)0
B)96
C)120
D)159
10

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073401765/663702/C20_img1.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (27.0K)</a>

How many dozen T-shirts should be purchased if the maximin strategy is used?
A)1
B)2
C)3
D)4
11

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/0073401765/663702/C20_img1.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (27.0K)</a>

How many dozen T-shirts should be purchased if the maximax strategy is used?
A)1
B)2
C)3
D)4





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