The management is faced with the problem of choosing one of the products for manufacturing. The probability matrix after market research for the two products was as follows: State of nature Acts Good Fair Poor Product 'A' 0.75 0.15 0.10 Product 'B' 0.60 0.30 0.10 The profits that the management can make for different levels of market acceptability of the products are as follows : Profit (in USD) if market is Acts Good Fair Poor Product 'A' 35,000 15,000 5,000 Product 'B' -1,000 20,000 Loss 3,000 Calculate expected value of the choice of alternative and advise the management
The management is faced with the problem of choosing one of the products for manufacturing. The probability matrix after market research for the two products was as follows: State of nature Acts Good Fair Poor Product 'A' 0.75 0.15 0.10 Product 'B' 0.60 0.30 0.10 The profits that the management can make for different levels of market acceptability of the products are as follows : Profit (in USD) if market is Acts Good Fair Poor Product 'A' 35,000 15,000 5,000 Product 'B' -1,000 20,000 Loss 3,000 Calculate expected value of the choice of alternative and advise the management
A First Course in Probability (10th Edition)
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ISBN:9780134753119
Author:Sheldon Ross
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![The management is faced with the problem of choosing one of the products
for manufacturing. The probability matrix after market research for the two products was as
follows:
State of nature
Acts
Good
Fair
Рoor
Product 'A'
0.75
0.15
0.10
Product 'B'
0.60
0.30
0.10
The profits that the management can make for different levels of market acceptability of the
products are as follows :
Profit (in USD) if market is
Acts
Good
Fair
Рor
Product 'A'
35,000
15,000
5,000
Product 'B'
-1,000
20,000
Loss 3,000
Calculate expected value of the choice of alternative and advise the management.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F81d0310d-a41c-4fce-ae24-164808ec3624%2Fca636dde-4f6c-41a6-848f-75f9c7a12cd1%2Fgnfe4x_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The management is faced with the problem of choosing one of the products
for manufacturing. The probability matrix after market research for the two products was as
follows:
State of nature
Acts
Good
Fair
Рoor
Product 'A'
0.75
0.15
0.10
Product 'B'
0.60
0.30
0.10
The profits that the management can make for different levels of market acceptability of the
products are as follows :
Profit (in USD) if market is
Acts
Good
Fair
Рor
Product 'A'
35,000
15,000
5,000
Product 'B'
-1,000
20,000
Loss 3,000
Calculate expected value of the choice of alternative and advise the management.
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