An Electronics firm has a required payback period of 3 years for all of its projects. Currently the firm is analyzing two independent projects. Project A has an expected payback period of 2.8 yrs and a net present value of $6,900. Project B has and expected payback period of 3.1 years with a net present value of $28,400. Whic
Use the data in the following payoff matrix and regret matrix to answer the following questions:
Airport is Built at Location
Land Purchased at Location(s) A B
A $75.0 $15.0
B ($25.0) $125.0
The operations manager for a community bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, medium, or high as follows:
Bus Low Medium High
I'm absolutely lost on how to figure out EVPI using a decision tree.
I've attached the decision trees for two items (labeled figure 12.11, 12.12) and I am trying to calculate expected value of perfect information for each tree. I don't know how to set this up manually and the PrecisionTool software for use with Excel that c
In your own words, what are the benefits of a decision tree plan that displays decision alternatives?
As it is, there are expected values of decision alternatives As I understand it, it is beneficial for decision analysis problems. There are decision alternatives including probabilities and payoffs with chance outcomes that c