Explore BrainMass
Share

Explore BrainMass

    Opportunity Loss

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    The concessions manager at our local college baseball game must decide whether to have the vendors sell sun visors or umbrellas. There is a 30% chance of rain, a 15% chance of overcast skies, and a 55% chance of sunshine, according to the weather forecast where the game is to be held. The manager estimates the following profits will result from each decision given each set of weather conditions.

    Weather Conditions

    Decision Rain .30 Overcast .15 Sunshine .55

    Sun visors $-500 $-200 $1,500

    Umbrellas $2,000 0 -900

    a. I need to compute the expected value for each decision and select the best one.

    b. I also need to develop the opportunity loss table and compute the expected opportunity loss for each decision.

    © BrainMass Inc. brainmass.com October 9, 2019, 6:03 pm ad1c9bdddf
    https://brainmass.com/business/business-math/77000

    Solution Summary

    This solution is comprised of a detailed explanation to compute the expected value for each decision and select the best one.

    $2.19