What is the expected total cost

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Reference no: EM131210635

Question 1:

Problem A If the CEO wants to plan expansion in two new states, which should he choose, and what is the expected total cost?

  Declining Same Improving EMV
State 0.25 0.4 0.35  
Kentucky 22 19 15 18.35
Maryland 19 19 18 18.65
North Carolina 19 17 15 16.8
Tennessee 23 17 14 17.45
Virginia 25 21 13 19.2




 
Max 25 21 18  
Payoff of decision made with perfect information 19.2 or Virginia  








EMVPI 20.95



Max EMV 19.2



EVPI 1.75

Problem B Which two states would you build in if you know the national economy will decline?

Tennesse 2

Kentucky 3

Which two states would you build in if you know the national economy will remain stable?

Virgina

Maryland & Kentucky

Which two states would you build in if you know the national economy will improve?

Maryland

Kentucky/North Carolina

Question 2:

Problem A Construct a decision tree to model this decision problem.

(Start your tree in cell B24 so you have enough room for the tree. There is also a data table started for you in cell T7)

Problem B "Will you tell the personnel manager to hire 3 or 4 full-time people?

Problem C "Find the hourly overtime that reverses your decision. Record your response on the ""Part 2-Response Tab"".

(You may copy your data from the Part 2 tab to complete this calculation).

Attachment:- DecisionAnalysis_Lowery.xlsx

Reference no: EM131210635

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