1. The Omega Mu (?M) service fraternity sells refreshments atthe University men’s field hockey games. It is attempting to decideon the best ordering policy for one of the items it sells: theBulldog Ice Cream Bar. The bars come in cartons of 50, so thefraternity can buy 100, 50, or 0 bars from the distributor. Theweather on game day can be sunny, cloudy, or rainy. If it is sunny,100 bars will be sold; if cloudy 50 bars will be sold; and ifrainy, 0 bars will be sold. The order must be placed one week inadvance, so the fraternity has no way of knowing what the weatherwill be on game day. The bars cost ?M $1.00 each and sell for$2.50. Any unsold bars must be discarded and written off.
a. Develop a decision table for this problem.
b. Using the Maximax method, how many bars should be bought?
c. Using the Maximin method, how many bars should be bought?
d. Using the Equally Likely method, how many bars should bebought?
e. Using the Minimax Regrets method, how many bars should bebought?
2. Based on past history, the probabilities of sunny, cloudy,and rainy weather are .6, .3, and .1, respectively.
a. How many bars should be bought?
b. The distributor will let Omega Mu wait until the morning ofthe game to place an order. In that way, they will know what theweather will be with certainty? However, the distributor willcharge an expediting fee for the order. How much should ?M bewilling to pay to wait until game day?
