The Plastic Company must choose between two mutually exclusive alternatives. With alternative 1 an inferior product will be marketed that is best suited to low levels of demand whereas alternative 2 is a superior product that is best suited to high levels of demand. There are only two possible levels of demand - high and low and the probabilities of each event occurring is 0.5. The predicted profits for each alterative are: Low demand (R) High demand (R) Alternative 1 350,000 560,000 Alternative 2 35,000 700,000 Using the data above relating to the Plastic Company, which alternative should be selected using the maximin criterion? A. It is not possible to use the maximin criterion for the data given B. Alternative 2 C. Neither alternative D. Alternative 1

The Plastic Company must choose between two mutually exclusive alternatives. With alternative 1 an inferior product will be marketed that is best suited to low levels of demand whereas alternative 2 is a superior product that is best suited to high levels of demand. There are only two possible levels of demand - high and low and the probabilities of each event occurring is 0.5. The predicted profits for each alterative are: Low demand (R) High demand (R) Alternative 1 350,000 560,000 Alternative 2 35,000 700,000 Using the data above relating to the Plastic Company, which alternative should be selected using the maximin criterion? A. It is not possible to use the maximin criterion for the data given B. Alternative 2 C. Neither alternative D. Alternative 1

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

See similar textbooks

Related questions

Q: Two penecay postively correiated securties are combined into a portfolio. One security is expected…

A: Given: Perfect positively correlated Return Volatility 10% 20% 15% 25% ? 30%

Q: Arina plans to form an investment portfolio that comprised of 50 percent investment in Share X, 25…

Q: An investor is trying to decide between two funds, Fund A or Fund B. The investor consults an…

A: Given data

Q: jessie Lim is definitely considering buying a private apartment near her parents’ house. She is…

A: Jessie Lim is considering buying a 3-room private apartment near her parents’ house priced at $1.8…

Q: Consider a 5-year bond with a face value of $100 that pays an annual coupon of 6% and is currently…

A: a) Let's start by calculating the bond's value and expected return for each rating scenario after…

Q: y analysis has established the historical risk pre uld potentially be included in your calculations:…

A: Given as,

Q: Malak is designing an experiment. In this experiment, he wants know if "learning about sustainable…

A: (what type of experiment is in given question) This experiment is a Solomon four-group design…

Q: You are asked to choose between two projects A or B based on the highest gain (or the lowest loss).…

Q: Your company has signed a contract with a good customer to ship the customer an order no later than…

A: It is given that expected days to ship is 17 to 22 days and we are determining the average of these…

Q: You are considering three investments alternatives for some spare cash: Old Reliable Corp (A1),…

A: Given data Probability of boom ( P1 )= 0.6 Probability of bust ( P2 ) = 0.4 Outcomes for Old…

Q: UG can only properly release a limited number of games, even though they have a number of candidates…

A: The expected profit for the Game 1 alternative is $5,205,000 The expected profit for the Game 2…

Q: Hudson Corporation is considering three options for managing its data processing operation: continue…

A: Given: Staffing Options High Medium Low Own staff 650 650 600 Outside Vendor 900 600 300…

Q: Frank James is considering purchasing life insurance. He must pay a $180 premium for a $100,000…

A: Given If Frank wishes to maximizehis EMV, he would not buy the policy if the EMV were negative for…

Q: here are two investments projects A and B each involving an initial investment of $2,000. The…

A: Expected value Investment A The expected value can be calculated as: Investment B The expected…

Q: Financial analysts have developed models based on financial ratios that predict whether or not a…

A: Given Model correctly predicted the bankruptcy of 88 %of firms that in fact did fail 82% non…

Q: A company produces mini fridges a week at three plants. Plant A produces at a level of 35% per week,…

A: The production of Plant A is 35%. The production of Plant B is 20%. The production of Plant C is…

Q: The Bilter Company must choose between two mutually exclusive projects. Project 1 is best suited to…

A: Given data: Probabilities of each event=0.5.

Q: Venus Flycatcher Company sells exotic plants and is trying to decide which of two hybrid plants to…

A: Given data:

Q: The manager of Alaina’s Garden Center must make theannual purchasing plans for rakes, gloves, and…

A: Given, Quarter 1 Year 1 Year 2 1 45 67 2 339 444 3 299 329 4 222 283 Total 905 1123…

Q: At year 1, Daisy Ltd, American company expects CFs of 150000$ from operations in US and 470000…

Q: - b(q, + 92 +...+ qy)-c)q, - 9N)-c- bq, =0 + 9N)-c %3D lim n→∞ \n + 1, 1 = 0 lim n→∞

A: *answer:

Q: Glaxo Co’s R & D division is considering to develop a new drug project to get ahead of its…

A: As per given by the question, project must be completed in 2 years at a cost of 1,00,000, otherwise…

Q: farmer wants to decide which of the three crops he should plant on his 100-acre farm. The profit…

A: For the given data, We have to calculate Which crop will be selected by equal likely rule and…

Q: A national study found that treating people appropriately for high blood pressure reduced their…

A: The probability that people who do not know that they have high blood pressure is 0.5. The…

Q: this case, consider the stock price and dividends of the companies Power Electric Industries,…

A: *Answer: *6

Q: You are a statistician working at a small, but premium gourmet bakery. Your bakery can produce up to…

A: Given that maximum capacity of cakev =4

Q: The following excerpt is from an article in The New York Times in July 1999.+ While statistics are…

A: Given that The following excerpt is from an article in The New York Times in July 1999.While…

Q: 33. V2m – 1+2= m - 34. V2x + 9 = Va +3 %3| 35. Vē+ V1– e = 1

A: The equation is 2m-1+2=m. Find the value of m: 2m-1=m-22m-12=m-222m-1=m2-4m+4m2-6m+5=0 Solve the…

Q: Suppose we are interested in investing in one of three investment opportunities: d1, d2, or d3. The…

A: P(s1)=0.2, P(s2)=0.3, P(s3)=0.5.Given data:Decision alternatives1s2s3d1382828d28060-10d3154016

Q: A city manager is considering three strategies for a $1,000 investment. The probable returns are…

A: We have given three types of strategies for return from the investment of city manager.

Q: UG can only properly release a limited number of games, even though they have a number of candidates…

A: The expected profit for the Game 1 alternative is $5,205,000 The expected profit for the Game 2…

Q: Examine the table above . The insurance company does not know the probabilities of falling sick for…

A: The table shows the probability of falling sick of individuals and the total insured income to be…

Q: Suppose a distribution center is considering three options for expansion. The first one is to expand…

A: Given that, A distribution center is considering three options for expansion. Since you have posted…

Q: 2. This year Karen has decided to diversify her business by growing broc- coli as well as lettuce.…

Q: (a)Consider a flight with a seating capacity of 160 seats. This flight is always full and there is a…

A: Use the given seating capacity and the actual NSR to determine the asked questions.

Concept explainers

Correlation

Correlation defines a relationship between two independent variables. It tells the degree to which variables move in relation to each other. When two sets of data are related to each other, there is a correlation between them.

Linear Correlation

A correlation is used to determine the relationships between numerical and categorical variables. In other words, it is an indicator of how things are connected to one another. The correlation analysis is the study of how variables are related.

Regression Analysis

Regression analysis is a statistical method in which it estimates the relationship between a dependent variable and one or more independent variable. In simple terms dependent variable is called as outcome variable and independent variable is called as predictors. Regression analysis is one of the methods to find the trends in data. The independent variable used in Regression analysis is named Predictor variable. It offers data of an associated dependent variable regarding a particular outcome.

Question

Low demand (R) High demand (R)

Alternative 1 350,000 560,000

Alternative 2 35,000 700,000

Using the data above relating to the Plastic Company, which alternative should be selected using the maximin criterion?

	A.	It is not possible to use the maximin criterion for the data given
	B.	Alternative 2
	C.	Neither alternative
	D.	Alternative 1

Video Video

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

$Correlation, Regression, and Association$

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, probability and related others by exploring similar questions and additional content below.

Similar questions

4. A merchant stocks a certain perishable item. He knows that on any given day, he will have a demand for either 2, 3, or 4 of this items with probabilities 0.1, 0.4 and 0.5 respectively. What is the average daily demand?
Suppose you are a production manager for a small firm that manufactures designer phone cases. Your production facility utilizes three machines. Quality is binary — each phone case is either defective or it is not defective. Each hour, Machines 1, 2, and 3 produce 10, 10 and 20 phone cases, respectively. But because the machines differ slightly in their technology, data on past production has shown that they differ in terms of their rates of defective output — specifically, Machines 1, 2, and 3 have rates of defective production of 2%, 4%, and 5%, respectively. If one phone case is selected randomly from one hour’s total output, and that phone case is found to be defective, what is the probability that it was produced by Machine 1? Machine 2? Machine 3?
An online cosmetic seller intends to send parcel on Cash On delivery in an attempt to increase her business. One out of every 10 parcels are returned, and the seller loses Rs. 350 (paid for delivery). But if the parcel is received, she gets a flat profit of Rs. 1000. Should she go for this new strategy? What is her expected net gain on each parcel?
The Harriet Hotel in downtown Boston has 100 rooms that rent for $150 per night. It costs the hotel $30 per room in variable costs (cleaning, bathroom items, etc.) each night a room is occupied. For each reservation accepted, there is a 5% chance that the guest will not arrive. If the hotel overbooks, it costs $200 to compensate guests whose reservations cannot be honored. How many reservations should the hotel accept if it wants to maximize the average daily profit?
A trader invented a strategy where he can either win or lose a certain amount of money every day (say, k dollars) with equal probability, independently of all other days. (In fact, such a strategy is not very difficult to implement - buy a very liquid asset whose price moves without major jumps and liquidate the position as soon as you are making or losing k dollars). He then made the following statement: “If I use my strategy every day for the next 400 days, my chances of staying within 10,000 dollars of the original account balance are equal to 1/3.(a) What is k (approximately)?(b) What are his chances (approximately) of making over 20,000 with this strategy in 400 days?
A company is facing three types of decisions for the purchasing of a seasonal product. The profitprojection may depend on the demand level. The payoffs for the situations are given in the followingtable:DemandDecision High (s1) Medium (s2) Low (s3)d1 60 60 50d2 80 80 30d3 100 70 101. If the prior probabilities are 0.3, 0.3, and 0.4, respectively, what is the recommended decision?Show all the calculations and answer with a decision tree.2. At each preseason sales meeting, the vice president of sales provides a personal opinion regarding potential demand for the product. The prediction of the vice president have alwaysbeen either excellent (E) or very good (G). Posterior probabilities are as follows.P(V)=0.7; P(E)=0.3P(s1|E)=0.34; P(s1|V)=0.2P(s2|E)=0.32; P(s2|V)=0.26;Use a decision tree to give the optimal decision strategy.43. Give the EVPI and the EOL, and EVSI.4. Suppose that the prior probability of a low demand is always fixed to 0.4, give a sensitivityanalysis on the other…
You have done risk analysis and determine the following risks and their probabilities could affect your project. Based on these risks, what should you contingency reserve be? Risk 1: 50% chance of a weather delay costing $5,000Risk 2: 20% chance of a worker strike costing $10,000Risk 3: 10% chance of catastrophic failure costing $50,000
You are considering purchasing stand-alone shares in two companies: Company A and Company B. While both companies expect a rate of return of 15% under normal market conditions, the possible returns under strong and weak economies differ. There is a 30% chance of a weak economy outcome, a 30% chance of a strong economy outcome, and a 40% chance of a normal outcome. For Company A, under a strong economy, they expect a return of 75%. Under a weak economy, they expect a return of -45%. For Company B, under a strong economy, they expect a return of 23%. Under a weak economy, they expect a return of 7.5%. 1. Create a probability distribution table for both companies. 2. Calculate the standard deviation for both companies. 3. With the distribution, create either a bar graph or a bell curve to graph the two companies. 4. From your calculations, describe which company you would consider investing in, if you were risk averse.