Vivian is deciding whether or not to prepare a tender for a job. The cost of producing the tender will be $1600, which will apply even if her company does not win the tender. Vivian has done some quick calculations and currently thinks that there is a 0.57 probability that the cost is $7000, and otherwise the cost is $10400. These costs do not include the cost of producing the tender. She also believes that the probability that the lowest bid submitted by any competing company will be $8800 is 0.35, that the probability that the lowest bid submitted by any competing company will be $16400 is 0.32, and otherwise that the lowest bid submitted by any competing company will be $12400 Vivian is considering whether she should bid $10800, bid $14400, or not bid. You may assume independence between the probabilities that Vivian assigns to her estimated costs of the project and the probabilities of her assumed lowest bids of competing companies. Thus if She submits a price of $14400 then the probability that they will make the maximum profit ($14400 - $7000 - $1600 = $5800) is P(winning) * P(low cost) = 0.32 * 0.57. Use the applet below to draw a decision tree that represents this situation and show all EMVs and probabilities. Indicate selection of decision options with probability = 1 for preferred options and probability = 0 for rejected options. Monetary values should be answered to the nearest dollar. Probabilities should be answered to three decimal places. Do not include dollar signs or commas. Use probability = 1 for the decisions that you will select and probability = 0 for the decisions that you will not select. Monetary values should be answered to the nearest dollar. Probabilities should be answered to three decimal places. Do not include dollar signs or commas.
Vivian is deciding whether or not to prepare a tender for a job. The cost of producing the tender will be $1600, which will apply even if her company does not win the tender. Vivian has done some quick calculations and currently thinks that there is a 0.57 probability that the cost is $7000, and otherwise the cost is $10400. These costs do not include the cost of producing the tender. She also believes that the probability that the lowest bid submitted by any competing company will be $8800 is 0.35, that the probability that the lowest bid submitted by any competing company will be $16400 is 0.32, and otherwise that the lowest bid submitted by any competing company will be $12400 Vivian is considering whether she should bid $10800, bid $14400, or not bid. You may assume independence between the probabilities that Vivian assigns to her estimated costs of the project and the probabilities of her assumed lowest bids of competing companies. Thus if She submits a price of $14400 then the probability that they will make the maximum profit ($14400 - $7000 - $1600 = $5800) is P(winning) * P(low cost) = 0.32 * 0.57. Use the applet below to draw a decision tree that represents this situation and show all EMVs and probabilities. Indicate selection of decision options with probability = 1 for preferred options and probability = 0 for rejected options. Monetary values should be answered to the nearest dollar. Probabilities should be answered to three decimal places. Do not include dollar signs or commas. Use probability = 1 for the decisions that you will select and probability = 0 for the decisions that you will not select. Monetary values should be answered to the nearest dollar. Probabilities should be answered to three decimal places. Do not include dollar signs or commas.
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...
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Transcribed Image Text:Vivian is deciding whether or not to prepare a tender for a job.
The cost of producing the tender will be $1600, which will apply even if her company does not win the tender.
Vivian has done some quick calculations and currently thinks that there is a 0.57 probability that the cost is $7000, and otherwise the cost is $10400. These
costs do not include the cost of producing the tender.
She also believes that the probability that the lowest bid submitted by any competing company will be $8800 is 0.35, that the probability that the lowest bid
submitted by any competing company will be $16400 is 0.32, and otherwise that the lowest bid submitted by any competing company will be $12400
Vivian is considering whether she should bid $10800, bid $14400, or not bid.
You may assume independence between the probabilities that Vivian assigns to her estimated costs of the project and the probabilities of her assumed lowest
bids of competing companies. Thus if She submits a price of $14400 then the probability that they will make the maximum profit ($14400 - $7000 - $1600 =
$5800) is P(winning) *P(low cost) = 0.32*0.57.
Use the applet below to draw a decision tree that represents this situation and show all EMVs and probabilities. Indicate selection of decision options with
probability = 1 for preferred options and probability = 0 for rejected options.
Monetary values should be answered to the nearest dollar. Probabilities should be answered to three decimal places. Do not include dollar signs or commas.
Use probability = 1 for the decisions that you will select and probability = 0 for the decisions that you will not select. Monetary values should be answered to the
nearest dollar. Probabilities should be answered to three decimal places. Do not include dollar signs or commas.
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