Calculate the value of expected value, Mathematics

The owner of TMH Hospital wants to open a new facility in a certain area. He usually builds 25-, 50-, or 100-bed facilities, depending on whether anticipated demand is low, medium or high. On the basis of his past experience, the probabilities of low demand, Medium demand and high demand are estimated as 0.1, 0.4and 0.5 and the short-range payoffs in Rs are calculated as follows.

Demand Acts
Build 25 bed Build 50 bed Build 100 bed

Low                  30,000                -20,000               -40,000
Medium            35,000                 50,000               -10,000
High                 40,000                 55,000                75,000

1) What would be the best decision?

2) What is the value of Expected Value of Perfect Information?

 

Posted Date: 2/27/2013 1:01:20 AM | Location : United States







Related Discussions:- Calculate the value of expected value, Assignment Help, Ask Question on Calculate the value of expected value, Get Answer, Expert's Help, Calculate the value of expected value Discussions

Write discussion on Calculate the value of expected value
Your posts are moderated
Related Questions
1) find the maxima and minima of f(x,y,z) = 2x + y -3z subject to the constraint 2x^2+y^2+2z^2=1 2)compute the work done by the force field F(x,y,z) = x^2I + y j +y k in moving

i dont understand what my teacher disccussing thats why i want to learn for this lesson. i want to ask'' what is the variables?

It’s been a busy weekend for Larry. Five people in his neighborhood left on vacation Saturday morning and each of them left a pet for Larry to care for until they return. It’s a go

Covariance The variance is a measure of the variability or dispersion in a variable or data set. A measure of the variability of one variable (or data set) in relatio

an insurance salesman sells policies to 5 men, all of identical age in good health. the probability that a man of this particular age will be alive 20 years hence is 2/3.Find the p

Probability Distributions Since the value of a random variable cannot be predicted accurately, by convention, probabilities are assigned to all the likely values that the varia

find all the 8th roots of (19+7i)

Bill spent 50% of his savings on school supplies, and then he spent 50% of what was left on lunch. If he had $6 left after lunch, how much did he have in savings at the starting?

The F Distribution The F distribution is the distribution of the ratio of 2 random variables. Both random variables have yet another distribution, called the c 2 Distri

Parallel to the line specified by 10 y + 3x= -2 In this case the new line is to be parallel to the line given by 10 y ? 3x ? -2 and so it have to have the similar slope as this