Dwayne Whitten, president of Whitten Industries, isconsidering whether to build a manufacturing plant in north Texas. His decision is summarized in the following table: AlternativesFavorable MarketUnfavorable MarketBuild large plant$400,000−$300,000Build small plant$120,000−$15,000Don't Build$0$0Market Probability0.400.60a) The correct decision tree for Dwayne is shown inFigure ____ (allpayoffs are inthousands).b) To maximize the return, Dwayne's decision should be to ______ .c) For Dwayne, the expected value of perfect information (EVPI) =$___________(enter your answer as a whole num

Answered: Dwayne Whitten, president of Whitten…

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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Dwayne Whitten, president of Whitten Industries, is

considering whether to build a manufacturing plant in north Texas. His decision is summarized in the following table:

Alternatives	Favorable Market	Unfavorable Market
Build large plant	$400,000	−$300,000
Build small plant	$120,000	−$15,000
Don't Build	$0	$0
Market Probability	0.40	0.60

a) The correct decision tree for Dwayne is shown in

Figure ____

(all

payoffs are in

thousands).

b) To maximize the return, Dwayne's decision should be to ______

c) For Dwayne, the expected value of perfect information (EVPI) =

$___________

(enter your answer as a whole num

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