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If he uses the Laplace criterion, which size bus will he decide to purchase?

If he uses the Laplace criterion, which size bus will he decide to purchase?

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, medium, or high, as follows: Bus Small Medium Large small DEMAND LOW 50 40 20 medium If he uses the Laplace criterion, which size bus will he decide to purchase? MEDIUM 60 80 50 large either small or medium either medium or large HIGH 70 90 120,
Transcribed Image Text:The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, medium, or high, as follows: Bus Small Medium Large small DEMAND LOW 50 40 20 medium If he uses the Laplace criterion, which size bus will he decide to purchase? MEDIUM 60 80 50 large either small or medium either medium or large HIGH 70 90 120,
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