The director of social services of a county has learned that the state has mandated additional information requirements. This will place an additional burden on the agency. The director has identified three acceptable alternatives to handle the increased workload. One alternative is to reassign present staff members, the second is to hire and train two new workers, and the third is to redesign current practice so that workers can readily collect the information with little additional effort. An unknown factor is the caseload for the coming year when the new data will be collected on a trial basis. The estimated costs for various options and caseloads are shown in the following table: CASELOAD Moderate High $80* 70 Very High Reassign staff 90 95 New staff 70 70 Redesign collection 90 80 70 *Cost in $ thousands. After contemplating the caseload question, the director of social services has decided that reasonable caseload probabilities are 0.30 for moderate, 0.50 for high, and 0.20 for very high. a. Which alternative will yield the minimum expected cost? O Reassign New Staff O O Redesign
The director of social services of a county has learned that the state has mandated additional information requirements. This will place an additional burden on the agency. The director has identified three acceptable alternatives to handle the increased workload. One alternative is to reassign present staff members, the second is to hire and train two new workers, and the third is to redesign current practice so that workers can readily collect the information with little additional effort. An unknown factor is the caseload for the coming year when the new data will be collected on a trial basis. The estimated costs for various options and caseloads are shown in the following table: CASELOAD Moderate High $80* 70 Very High Reassign staff 90 95 New staff 70 70 Redesign collection 90 80 70 *Cost in $ thousands. After contemplating the caseload question, the director of social services has decided that reasonable caseload probabilities are 0.30 for moderate, 0.50 for high, and 0.20 for very high. a. Which alternative will yield the minimum expected cost? O Reassign New Staff O O Redesign
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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Transcribed Image Text:The director of social services of a county has learned that the state has mandated additional information requirements. This will place
an additional burden on the agency. The director has identified three acceptable alternatives to handle the increased workload. One
alternative is to reassign present staff members, the second is to hire and train two new workers, and the third is to redesign current
practice so that workers can readily collect the information with little additional effort. An unknown factor is the caseload for the
coming year when the new data will be collected on a trial basis. The estimated costs for various options and caseloads are shown in
the following table:
CASELOAD
Moderate High
$80*
Very High
Reassign staff
90
95
New staff
70
70
70
Redesign
90
80
70
collection
*Cost in $ thousands.
After contemplating the caseload question, the director of social services has decided that reasonable caseload probabilities are 0.30
for moderate, 0.50 for high, and 0.20 for very high.
a. Which alternative will yield the minimum expected cost?
Reassign
New Staff
Redesign
O O O
Transcribed Image Text:b. Determine the expected value of perfect information using an opportunity loss table. (Round your answers to the nearest whole
number. Leave no cells blank - be certain to enter "O" wherever required.)
Opportunity loss table
Moderate($)
High($)
Very High($)
EOL($)
Reassign
New Staff
Redesign
(0.30)
(0.50)
(0.20)
Expected value of perfect information
Expert Solution
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Estimated cost can be stated as the projection of the number of prices that will be acquired or obtained to develop or build any item or construct something. This price is derived as an important part of the capital budgeting approach for an internal project, or as an important part of the sales offer when attempting to sell to a client.
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