The national sales manager for \"I colored this\" (ICT) T-shirts provides all sa
ID: 3326617 • Letter: T
Question
The national sales manager for "I colored this" (ICT) T-shirts provides all salespersons with the following opportunity loss table showing the potential lost profit for each purchase decision or act from one to four dozen T-shirts. The probability of demand for each state of nature is also shown.
OPPORTUNITY LOSS TABLE
Future Demands
1
2
3
4
Probabilities of demands
0.2
0.4
0.3
0.1
Purchase Quantities
1
0
120
240
360
2
120
0
120
240
3
240
120
0
120
4
360
240
120
0
What is the expected opportunity loss of purchasing one dozen T-shirts?
Multiple Choice
Top of Form
84
108
156
204
Bottom of Form
OPPORTUNITY LOSS TABLE
Future Demands
1
2
3
4
Probabilities of demands
0.2
0.4
0.3
0.1
Explanation / Answer
The expected opportunity loss when 1 dozen t shirts is bought is computed as:
= 0*0.2 + 120*0.4 + 240*0.3 + 360*0.1
= 0 + 48 + 72 + 36 = 156
Therefore 156 is the required probability here.