question archive Strawberries The next few questions refer to this information: Jean Clark is the manager of the Midtown Safeway Grocery Store
Strawberries The next few questions refer to this information: Jean Clark is the manager of the Midtown Safeway Grocery Store
Subject:BusinessPrice:2.87 Bought7
Strawberries
The next few questions refer to this information:
Jean Clark is the manager of the Midtown Safeway Grocery Store. She now needs to replenish her supply of strawberries. Her regular supplier can provide as many cases as she wants. However, because these strawberries already are very ripe, she will need to sell them tomorrow and then discard any that remain unsold. Jean estimates that she will be able to sell 10, 11, 12, or 13 cases tomorrow. She can purchase the strawberries for $3 per case and sell them for $8 per case. Jean now needs to decide how many cases to purchase.
Jean has checked the store’s records on daily sales of strawberries. On this basis, she estimates that the prior probabilities are 0.2, 0.4, 0.3, and 0.1 for being able to sell 10, 11, 12, and 13 cases of strawberries tomorrow.
I am stuck on this part: What are decision variables and what are the states of nature in this problem?
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Answer:
Decision Variables
The decision variables are number of cases of straberries that she needs to purchase. So there are four decision variables as follows
D1 = purchase 10 cases of strawberries
D2 = purchase 11 cases of strawberries
D3 = purchase 12 cases of strawberries
D4 = purchase 13 cases of strawberries
States of Nature
There are four states of nature, which are determined by the number of cases of strawberries that Jean will be able to sell tomorrow
S1 = 10 cases of strawberries will be sold
S2 = 11 cases of strawberries will be sold
S3 = 12 cases of strawberries will be sold
S4 = 13 cases of strawberries will be sold
