7. Consider the following decision table, which Joe Blackburn has developed for Vanderbilt Enterprises: States of NatureDecision AlternativesProbability:0.350.250.40 LowMediumHighA $35$80$65B $85$50$70C $55$70$75D $70$85$65E $70$75$85Part 2The alternative that provides Blackburn the greatest expected monetary value(EMVLOADING...)is▼ DEABCThe EMV for this decision is$_______(enter your answer as a whole number).

The average outcome is determined when the future contains possibilities that may or may not materialize using the statistical concept of expected monetary value (EMV) analysis. A decision tree is frequently used in an EMV study to demonstrate the numerous options or circumstances. Given that: Low Probability = 0.35 Medium Probability = 0.25 High Probability = 0.4 I have arranged the given information, in table: Low Medium High Probability 0.35 0.25 0.4 A 35 80 65 B 85 50 70 C 55 70 75 D 70 85 65 E 70 75 85Probability A = (0.35*35)+(0.25*80)+(0.4*65) = 58.25Probability B = (0.35*85)+(0.25*50)+(0.4*70) = 70.25Probability C = (0.35*55)+(0.25*70)+(0.4*75) = 66.75Probability D = (0.35*70)+(0.25*85)+(0.4*65) = 71.75Probability E = (0.35*70)+(0.25*75)+(0.4*85) = 77.25 The alternative that provides Blackburn the Greatest Expected Monetary Value is E. The EMV for this decision = 77 (ANSWERS)

Answered: Consider the following decision table,…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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Part 2

The alternative that provides Blackburn the greatest expected monetary value

(EMV

)

▼

The EMV for this decision is

$_______(enter your answer as a whole number).

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