What would be the opportunity loss approach to the solution

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Reference no: EM131162220

Draw a decision tree for Exercise , and use the roll back procedure to solve this problem.
Exercise :
A health care supply chain manager is considering signing a contract with one of three major distributors. The decision is based strictly on cost minimization, and the cost of each contract varies according to the discount negotiated (deep, moderate, or low). The payoff table depicting costs and probabilities (of discount negotiation levels) is shown in Table.

a. Assuming that the health care supply manager is an optimist, which distributor would be chosen?

b. What would be the opportunity loss (cost avoidance) approach to the solution (hint: regrets)?

c. What would be the selection using EMV?

Reference no: EM131162220

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