ORS255 Operations Research

Operations ResearchTU Board 2081

A milkman buys milk at Rs. 20 per litre and sells at Rs. 25 per litre. Unsold milk has to be thrown away. The daily demand has the following probability distribution: Demand…

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A milkman buys milk at Rs. 20 per litre and sells at Rs. 25 per litre. Unsold milk has to be thrown away. The daily demand has the following probability distribution: Demand (litres)46485052545658606264Probability0.010.030.060.100.200.250.150.100.050.05 If each day's demand is independent of previous day's demand, using marginal analysis approach, how many litres should be ordered everyday so as to maximize the profit? Also find (a) Max. EMV (b) EPPI (c) EVPI.

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