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:

Nonindustrial Societies

Societies that do not rely on large-scale industry and technology for their economic production, often based on subsistence farming or pastoralism.

Kinship System

The social relationships that define and structure family connections among people, including duties, rights, and roles.

Clan System

A social structure used to organize families into larger groups sharing common ancestry and cultural traditions.

Ambilineal Descent

A form of descent in which individuals may inherit some family traits, affiliations, or belongings through either the maternal or paternal line, as selected by the individual, group, or society.