Suggest one other course of action that AB might follow, explaining what you consider to be its merits and demerits when compared with your answer at (a) above.
【参考答案及解析】
Expected value of variable costs = (0.1 × $95) + (0.6 × $85) + (0.3 × $70) = $81.50. We can now calculate an expected value of budgeted contribution at each client fee per day level. Client fee per day Variable cost $180 $200 $220 $81.50 1,551,375 1,553,312.50 1,454,250 If maximisation of EV of contribution is used as the decision basis, a client fee of $200 per day will be selected, with an EV of contribution of $1,555,312.50 (although this is very close to the EV of contribution which results from a client fee of $180).
Expected value of variable costs = (0.1 × $95) + (0.6 × $85) + (0.3 × $70) = $81.50. We can now calculate an expected value of budgeted contribution at each client fee per day level. Client fee per day Variable cost $180 $200 $220 $81.50 1,551,375 1,553,312.50 1,454,250 If maximisation of EV of contribution is used as the decision basis, a client fee of $200 per day will be selected, with an EV of contribution of $1,555,312.50 (although this is very close to the EV of contribution which results from a client fee of $180).