AEM 417 HW 5 - c) Case 1: 60% probability Case 2: 50%...

Info iconThis preview shows pages 1–9. Sign up to view the full content.

View Full Document Right Arrow Icon
= .222 8)/(.778) =.987 .2)/(.222) = .865 0 = $2015 e nts the amount one would pay for types of sample information. (i1)=P(S1)P(i1| S1) + P(S2)P(i1| S12) =0.595 (i2)=1-0.595 =0.405 (S1| i1) =0.824 (S1| i2) =0.519 ain =705784-705000 =-94216 (i1)=P(S1)P(i1| S1) + P(S2)P(i1| S12) =0.675 (i2)=1-0.675 =0.325 (S1| i1) =0.933 (S1| i2) =0.215 ain =705784-705000 =-169921 nom(5,20,.4)*.4+pbinom(5,20,.3)*.3+pbinom(5,20,.2)*.1->ij enom denom denom denom AEM 417 HW 5 Jackson Wang 1) P(S1)=.96 P(S2)=.04 P(i1 |S1)=.8 P(i1 |S2)=0.25 P(i2 |S1)=.2 P(i2 |S1)=.75
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2.)
Background image of page 2
Calculations for J&J: Calculations for Dudley:
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
a) Don’t hire any of the teams, the expected gains for J&J and Dudley are negative. b) We should implement the project; it has a EV of $705000
Background image of page 4
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 6
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 8
Background image of page 9
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: c) Case 1: 60% probability Case 2: 50% probability In both cases we should implement, however with a lower p, the expected value decreases $165,000. d) increase by $3? The EV goes down to $240,000. However the new research team shouldnt be hired but go ahead to produce the phones. 3) a) hw#4 EVwoSI= 1.014 EvwSI = 1.208 EVSI = 1.208-1.104 = 0.194 Million b ) I would hire Mr. Leaze, since the net gain would be $184,000 after deducting the fees. 4) a) Yes, they should go ahead with publishing, since the expected profit is $70,000 b) Using Splus: c) Do not publish...
View Full Document

Page1 / 9

AEM 417 HW 5 - c) Case 1: 60% probability Case 2: 50%...

This preview shows document pages 1 - 9. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online