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Howard Weiss Inc is considering building a sensitive new radiation scanning device His managers believe that there is a probability of 035 that the ATR Co will come out with a competitive

Howard? Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers believe that there is a probability of 0.35 that the ATR Co. will come out with a competitive product. If Weiss adds an assembly line for the product and ATR Co. does not follow with a competitive? product, Weiss's expected profit is $40,000?; if Weiss adds an assembly line and ATR follows? suit, Weiss still expects $10,000 profit. If Weiss adds a new plant addition and ATR does not produce a competitive? product, Weiss expects a profit of $600,000?; if ATR does compete for this? market, Weiss expects a loss of $100,000.

?a) Expected value for the

Add Assembly Line

option? =?

?(enter your answer as a whole? number).

Expected value for the

Build New PlantBuild New Plant

option? =?

?(enter your answer as a whole? number).

The alternative that provides Weiss the greatest expected monetary value ?(EMV

is

Build New Plant or add assembly line?

The value of the return under this decision is

?

?(enter your answer as a whole? number).

?b) The expected value of perfect information ?(EVPI?) for Weiss? =

?

?(enter your answer as a whole? number).

 

Apr 03 2020 View more View Less

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