The dealer is considering conducting a telephone survey on the customers' attitudes towards microwave ovens. The results of the survey will either be favorable (F), unfavorable (U) or no opinion (N). The dealer's probability estimates for the survey results based on the number of units demanded are:
P(F | D = 0) = .1
P(F | D = 2) .3
P(U | D = 0) = .8
P(U | D = 2) = .1
P(F | D = 1) = .2
P(F | D = 3) .9
P(U | D = 1) = .3
P(U | D = 3) = .1
What is the dealer's optimal decision without conducting the survey?
What is the EVPI?
Based on the survey results what is the optimal decision strategy for the dealer?
What is the maximum amount he should pay for this survey?
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