39.
Award: 10.00 points
MC Qu. 9-39 Based on the following payoff...
Based on the following payoff table, answer the following:
Alternative
Buy
Rent
Lease
Prior Probability
High
90
70
60
0.4
Low
−10
40
55
0.6
The expected value of perfect information is:
12.

55.

57.

69.

90.
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EVPI = EP(with perfect info) – EP(without more info). With perfect information, the payoff would be 90(0.4) +
55(0.6) = 69. Without more information, EP is determined using Bayes' decision rule (EP = 57). Therefore, EVPI =
69 − 57 = 12.
References
Difficulty: 2 Medium
MC Qu. 9-39
Based on the
following payoff...
Learning Objective:
Perform sensitivity
analysis with Bayes’
decision rule.
Th
Multiple Choice
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https://www.coursehero.com/file/39658035/Operations-Management-Homework-7pdf/
40.
Award: 10.00 points
MC Qu. 9-40 Based on the following payoff:...
Based on the following payoff table, answer the following:
Alternative
Small
Medium
Medium Large
Large
Extra Large
Prior Probability
Yes
10
20
30
40
60
0.3
No
30
40
45
35
20
0.7
The maximax strategy is:
small.

medium.

medium large.

large.

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extra large.
The maximax strategy chooses the alternative that has the highest maximum payoff. In this case, "Extra Large"
has a maximum payoff of 90, which is the highest payoff in the table.
References
Difficulty: 2 Medium
MC Qu. 9-40
Based on the
following payoff:...
Learning Objective:
Describe and evaluate
several alternative
criteria for making a
decision based on a
payoff table.
Th
Multiple Choice
This study source was downloaded by 100000829029605 from CourseHero.com on 07-22-2021 10:10:22 GMT -05:00
https://www.coursehero.com/file/39658035/Operations-Management-Homework-7pdf/
41.
Award: 10.00 points
MC Qu. 9-41 Based on the following payoff...
Based on the following payoff table, answer the following:
Alternative
Small
Medium
Medium Large
Large
Extra Large
Prior Probability
Yes
10
20
30
40
60
0.3
No
30
40
45
35
20
0.7
The maximin strategy is:
small.

medium.

medium large.


sh is
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large.
extra large.
The maximin strategy chooses the alternative that has the highest minimum payoff. In this case, "Large" has a
minimum payoff of 35.
References
Difficulty: 2 Medium
MC Qu. 9-41
Based on the
following payoff...
Learning Objective:
Describe and evaluate
several alternative
criteria for making a
decision based on a
payoff table.
Th
Multiple Choice
This study source was downloaded by 100000829029605 from CourseHero.com on 07-22-2021 10:10:22 GMT -05:00
https://www.coursehero.com/file/39658035/Operations-Management-Homework-7pdf/
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