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Answer (B) is correct . The calculation using an expected value approach weights each possible sales volume by its probability. Thus, the estimated demand is 4,400 pretzels. ? Volume Probability Result 2,000 ¡Á .10 = 200 3,000 ¡Á .15 = 450 4,000 ¡Á .20 = 800 5,000 ¡Á .35 = 1,750 6,000 ¡Á .20 = 1,200 Expected value 4,40
Answer (A) is incorrect because The figure of 4,000 pretzels assumes each outcome is equally likely.
Answer (C) is incorrect because The estimated demand using a deterministic approach based on the most likely outcome is 5,000 pretzels.
Answer (D) is incorrect because The figure of 4,400 pretzels is among the responses given.