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Quantitative Methods

1. s1 s2 s3
d1 10 8 6
d2 14 15 2
d3 7 8 9

The probabilities of each state s1, s2, s3 are 0.2, 0.4 and 0.4 respectively.
What is the EVPI?
Put your answer in the form x.x

2. The quality control manager for ENTA Inc. must decide whether to accept (a1), further analyze (a2), or reject (a3) a lot of incoming material. Assume the following payoff table is available. Historical data indicates that there is a 30% chance that the lot is poor quality (s1), a 50 % chance that the lot is fair quality (s2), and a 20% chance that the lot is good quality (s3). s1 s2 s3 a1 20 30 90 a2 60 70 10 a3 80 50 40 What is the maximum amount that you would be willing to pay for perfect information? put your answer in the form x.x or x

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1. s1 s2 s3
d1 10 8 6
d2 14 15 2
d3 7 8 9
The probabilities of each state s1, s2, s3 are 0.2, 0.4 and 0.4 respectively.
What is the EVPI?
Put your answer in the form x.x

First, you need to calculate the Expected Monetary Value (EMV) for each alternative by multiplying the result with the probability of each state.

s1 s2 s3 ...

Solution Summary

This solution is comprised of a detailed explanation to answer the request of the assignment of more than 200 words of text.

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