Posted: May 29th, 2021

Case Study: Waldo Books

Waldo Books needs to decide how many copies of a new hardcover release to purchase

for its shelves. The store has assumed that demand will be 50, 100, 150, or 200 copies

next month and they need to decide whether to order 50, 100, 150 or 200 books for this

period. Each book costs Waldo $20 and can be sold for $30. Waldo can sell any unsold

books back to their supplier for $4.

a) Which option should Waldo choose if they use the maximax criterion?

b) Which option should Waldo choose if they use the maximin criterion?

c) Which option should Waldo choose if they use the equally likely

criterion?

d) Which option should Waldo choose if they use the minimax regret

criterion?

e) Which option should Waldo choose if they use the criterion of realism

with _ = 0.7?

Place an order in 3 easy steps. Takes less than 5 mins.