Myrtle Air Express decided to offer direct servide from Cleveland to Myrtle Beach. Management must decide between a full-price service using the company's new fleet of jet aircraft and a discount service using smaller-capacity commuter planes. It is clear that the best choice depends on the market reaction to the service Myrtle Air offers. Management developed estimates of the contribution to profit for each type of service based on three possible levels of demand for service to Myrtle Beach: strong, medium and weak. The following table shows the estimated quarterly profits (in thousands of dollars): Demand for Service Service Strong Medium Weak Full Price 950 600 -400 Discount 750 450 300 Probability 0.4 0.3 0.3 Suppose that management of Myrtle Air Express has developed the following utility function: U(950) = 100, U(750) = 89, U(600) = 72, U(450) = 58, U(300) = 48, and U(-400) = 0. Use the expected utility approach to determine the optimal decision. What is the expected utility of the optimal choice? (Round to one decimal place.)
Myrtle Air Express decided to offer direct servide from Cleveland to Myrtle Beach. Management must decide between a full-price service using the company's new fleet of jet aircraft and a discount service using smaller-capacity commuter planes. It is clear that the best choice depends on the market reaction to the service Myrtle Air offers. Management developed estimates of the contribution to profit for each type of service based on three possible levels of demand for service to Myrtle Beach: strong, medium and weak. The following table shows the estimated quarterly profits (in thousands of dollars): Demand for Service Service Strong Medium Weak Full Price 950 600 -400 Discount 750 450 300 Probability 0.4 0.3 0.3 Suppose that management of Myrtle Air Express has developed the following utility function: U(950) = 100, U(750) = 89, U(600) = 72, U(450) = 58, U(300) = 48, and U(-400) = 0. Use the expected utility approach to determine the optimal decision. What is the expected utility of the optimal choice? (Round to one decimal place.)
Myrtle Air Express decided to offer direct servide from Cleveland to Myrtle Beach. Management must decide between a full-price service using the company's new fleet of jet aircraft and a discount service using smaller-capacity commuter planes. It is clear that the best choice depends on the market reaction to the service Myrtle Air offers. Management developed estimates of the contribution to profit for each type of service based on three possible levels of demand for service to Myrtle Beach: strong, medium and weak. The following table shows the estimated quarterly profits (in thousands of dollars): Demand for Service Service Strong Medium Weak Full Price 950 600 -400 Discount 750 450 300 Probability 0.4 0.3 0.3 Suppose that management of Myrtle Air Express has developed the following utility function: U(950) = 100, U(750) = 89, U(600) = 72, U(450) = 58, U(300) = 48, and U(-400) = 0. Use the expected utility approach to determine the optimal decision. What is the expected utility of the optimal choice? (Round to one decimal place.)
Myrtle Air Express decided to offer direct servide from Cleveland to Myrtle Beach. Management must decide between a full-price service using the company's new fleet of jet aircraft and a discount service using smaller-capacity commuter planes. It is clear that the best choice depends on the market reaction to the service Myrtle Air offers.
Management developed estimates of the contribution to profit for each type of service based on three possible levels of demand for service to Myrtle Beach: strong, medium and weak.
The following table shows the estimated quarterly profits (in thousands of dollars):
Demand for Service
Service
Strong
Medium
Weak
Full Price
950
600
-400
Discount
750
450
300
Probability
0.4
0.3
0.3
Suppose that management of Myrtle Air Express has developed the following utility function:
Use the expected utility approach to determine the optimal decision.
What is the expected utility of the optimal choice? (Round to one decimal place.)
Expression, rule, or law that gives the relationship between an independent variable and dependent variable. Some important types of functions are injective function, surjective function, polynomial function, and inverse function.
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