Use This Information to Answer the Following Questions

question 14

Essay

Use this information to answer the following questions.
AAA auto supply store sells snow tires which are ordered every Friday to meet next week's demand.The sales price for the most popular size is $50 per tire and its cost for AAA is $35.If too many tires are ordered AAA incurs an inventory carrying cost of $2 per tire.If AAA is out of stock,it forgoes the profits from missed sales.AAA has the option to order 100,150,or 200 tires to meet next week's demand which can be either 100,150,or 200 tires.
-Refer to the information above.Based on its historical demand distribution,assume that AAA Inc.has determined the following probability information: P(100)= 0.4,P(150)= 0.3,and P(200)= 0.3.
a.Develop a decision tree for this problem.
b.Analyze the decision tree and determine which alternative should be chosen.
c.Using the expected opportunity loss (EOL)criterion,which alternative should be chosen?

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Definitions:

Appetite

The desire to eat food, felt as hunger, which can be influenced by physiological, psychological, and environmental factors.

Taste Buds

sensory organs located on the tongue, responsible for the perception of taste, including sweet, sour, salty, bitter, and umami flavors.

Glucose Entry

The process by which glucose, a primary source of energy, enters cells to be utilized for metabolic processes.

Injecting Insulin

The process of using a syringe or an insulin pen to deliver insulin, a crucial hormone for people with diabetes, into the body to regulate blood sugar levels.