A company is evaluating 3 different distribution plans for a new product. The company has developed best case (60% probability) and worst case (40% probability) estimates for each plan. Results are summarized in the table below. What is the optimal decision based on the maximum expected value criterion? Worst Best Plan 1 -2 10 Plan 2 3 6 Plan 3 4 5 Prob 0.4 0.6

A company is evaluating 3 different distribution plans for a new product. The company has developed best case (60% probability) and worst case (40% probability) estimates for each plan. Results are summarized in the table below. What is the optimal decision based on the maximum expected value criterion? Worst Best Plan 1 -2 10 Plan 2 3 6 Plan 3 4 5 Prob 0.4 0.6

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question 2 is only for background informaiton
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