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Director of legal services of ABC Company must decide whether to hire another full-time lawyer or to hire part-time lawyers. Anticipated costs for the two options under three possible demand levels are given in the table below:
States of Nature
Alternatives Low Demand Medium Demand High Demand
Hire full-time $2,400 $3,300 $4,400
Hire part-time $4,800 $3,400 $2,400
Probabilities 0.5 0.3 0.2
What is the Expected Value of Perfect Information? Specify only the amount. e.g. 350
1. The monthly sales for Telco Batteries, Inc., were as follows: Month Sales Jan 20 Feb 21 Mar 15 Apr 14 May 13 Jun 16 Jul 17 Aug 18 Sep 20 Oct 20
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Item Cost - $7.00 Order Cost - $283.00 Annual Hold - 32% of item cost Annual Demand - 22,100 Average Demand - 442 per week Standard deviation of weekly demand 20 per week lead time
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