What is the expected total cost

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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