{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

HW13 Solutions

HW13 Solutions - OSCM 230 Homework 13 Solutions HOMEWORK#13...

This preview shows pages 1–4. Sign up to view the full content.

OSCM 230 Homework 13 Solutions H O M E W O R K   # 1 3   S O L U T I O N S D E C I S I O N   A N A L Y S I S Problem 8-28.  (a) Conduct survey. If results are favorable, build large shop. If the results are unfavorable, don't build any shop. (b) EVSI = \$11,000. EVwPI = \$35,400. Best EMV = \$19,000. EVPI = \$16,400. Efficiency = 67.07%.

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

View Full Document
OSCM 230 Homework 13 Solutions 8-40. (a) See file P8-40.XLS for the TreePlan solution. Conduct the survey questionnaire. If the response is positive, produce razor. If the response is negative, do not produce razor. Expected return = \$24,160. (b) EVPI = \$30,000. EVSI = \$9,160. Efficiency = 30.53%. (c) EVPI = \$30,000. EVSI = \$17,080. Efficiency = 56.93%. Problem 8-46. . See file P8-46.XLS for the TreePlan solution. If the survey is not conducted, the medium facility, with an EMV of \$670,000, is selected. If the survey is conducted, we first compute the revised probabilities using Bayes’ theorem, as follows. Prior Probabilities P(Low demand) = 0.15 P(Fair demand) = 0.40
OSCM 230 Homework 13 Solutions P(High demand) = 0.45 Conditional probabilities P(Low survey | Low demand) = 0.70 P(Fair survey | Low demand) = 0.20

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

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}