(Answered) : Steak Chop Butcher Shop Purchases Steak Local Meatpacking House Meat Purchased Monday 200 Q31509212

The Steak and Chop Butcher Shop purchases steak from a localmeatpacking house. The meat is purchased on Monday at $2.00 perpound, and the shop sells the steak for $4.00 per pound. Any steakleft over at the end of the week is sold to a local zoo for $1.00per pound. The possible demands for steak and the probability ofeach are shown in the following table:

Demand(lb.)              Probability

     20                                .10

     21                               .20

     22                                .30

    23                                .30

     24                               .10

  1.00

The shop must decide how much steak to order in a week.

1. Construct a payoff table for this decision situation anddetermine the amount of steak that should be ordered, usingexpected value.

2. Construct the opportunity loss table