MC Question 19
The following scenario relates to questions 16–20.
Mylo runs a cafeteria situated on the ground floor of a large corporate office block. Each of the five floors of the building are occupied and there are in total 1,240 employees.
Mylo sells lunches and snacks in the cafeteria. The lunch menu is freshly prepared each morning and Mylo has to decide how many meals to make each day. As the office block is located in the city centre, there are several other places situated around the building where staff can buy their lunch, so the level of demand for lunches in the cafeteria is uncertain.
Mylo has analysed daily sales over the previous six months and established four possible demand levels and their associated probabilities. He has produced the following payoff table to show the daily profits which could be earned from the lunch sales in the cafeteria:
| Demand level | Probability | Supply level | |||
|---|---|---|---|---|---|
| 450 | 620 | 775 | 960 | ||
| $ | $ | $ | $ | ||
| 450 | 0·15 | 1,170 | 980 | 810 | 740 |
| 620 | 0·30 | 1,170 | 1,612 | 1,395 | 1,290 |
| 775 | 0·40 | 1,170 | 1,612 | 2,015 | 1,785 |
| 960 | 0·15 | 1,170 | 1,612 | 2,015 | 2,496 |
19. The human resources department has offered to undertake some research to help Mylo to predict the number of employees who will require lunch in the cafeteria each day. This information will allow Mylo to prepare an accurate number of lunches each day.
What is the maximum amount which Mylo would be willing to pay for this information (to the nearest whole $)?
A $191
B $359
C $478
D $175