Calculate the value of expected value, Mathematics

Assignment Help:

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?

 


Related Discussions:- Calculate the value of expected value

Probability, Mike sells on the average 15 newspapers per week (Monday – Fri...

Mike sells on the average 15 newspapers per week (Monday – Friday). Find the probability that 2.1 In a given week he will sell all the newspapers

Probability, TWO PERSONS A AND B AGREE TO MEET AT A PLACE BTWEEN 11 TO 12 N...

TWO PERSONS A AND B AGREE TO MEET AT A PLACE BTWEEN 11 TO 12 NOON.  THE FIRST ONE TOARRIVE WAITS FOR 20 MIN AND THEN LEAVE. IF THE TIME OF THIR ARRIVAL BE INDEPENDET AND AT RNDOM,T

Solve step by step, Use an appropriate infinite series method about x = 0 t...

Use an appropriate infinite series method about x = 0 to find two solutions of the given differential equation: y''''-xy''-y=0

Geometry, how you know that your first quadrilateral is an isosceles trapez...

how you know that your first quadrilateral is an isosceles trapezoid

Logarithms, find any integer from 1-128 on a logarithmic scale

find any integer from 1-128 on a logarithmic scale

Working definition of limit - sequences and series, Working Definition of L...

Working Definition of Limit 1. We state that if we can create an as close to L like we want for all adequately large n.  Alternatively, the value of the a n 's approach

Exponential functions, The exponential functions are useful for descr...

The exponential functions are useful for describing compound interest and growth. The exponential function is defined as:          y = m. a x where '

Core concepts, Discuss mareketing core concepts analysing how they are used...

Discuss mareketing core concepts analysing how they are used in marketing hospitality product

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd