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:

Achievement Motivation

The drive or intrinsic motivation that leads individuals to pursue and attain goals.

Projective Test

A type of psychological assessment that uses ambiguous stimuli to elicit responses that reflect aspects of an individual's personality, desires, and conflicts.

Personality Assessment

An evaluation process involving a variety of techniques to measure an individual's personality characteristics and traits.

Unconscious Mental Dynamics

The underlying psychological forces, unknown to the conscious mind, that influence individual behaviors and thoughts.