Delmas enters into hundreds of similar furniture supply contracts each year, with year-end rebates. For a typical contract, its historical data give the following outcomes: 100,000 with a probability of 60%, 90,000 with a probability of 30% and 80,000 with a probability of 10%. Delmas has concluded that the expected value is the most predictive method and that the constraint does not reduce the estimate (case data). Compute the estimated consideration.
- Amount of the high outcome
- 100,000
- Probability of the high outcome
- 60 %
- Amount of the middle outcome
- 90,000
- Probability of the middle outcome
- 30 %
- Amount of the low outcome
- 80,000
- Probability of the low outcome
- 10 %