Use the following to answer questions 17 - 20: The operations manager for a loca

Question

Use the following to answer questions 17 - 20:

The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, moderate, or high, as follows:

If he uses the maximin criterion, which size bus will he decide to purchase?

  A. small

  B. medium

  C. large

  D. either small or medium

  E. either medium or large

Reset Selection

  Mark for Review What's This?

Question 18 of 33

3.0 Points

If he feels the chances of low, moderate, and high demand are 30%, 30%, and 40% respectively, what is the expected annual profit for the bus that he will decide to purchase?

  A. $15,000

  B. $61,000

  C. $69,000

  D. $72,000

  E. $87,000

Reset Selection

  Mark for Review What's This?

Question 19 of 33

3.0 Points

If he feels the chances of low, moderate, and high demand are 30%, 30%, and 40% respectively, what is his expected value with perfect information?

  A. $15,000

  B. $61,000

  C. $69,000

  D. $72,000

  E. $87,000

Reset Selection

  Mark for Review What's This?

Question 20 of 33

3.0 Points

If he feels the chances of low, moderate, and high demand are 30%, 30%, and 40% respectively, what is his expected value of perfect information?

  A. $15,000

  B. $61,000

  C. $69,000

  D. $72,000

  E. $87,000

If he uses the maximin criterion, which size bus will he decide to purchase?

  A. small

  B. medium

  C. large

  D. either small or medium

  E. either medium or large

Reset Selection

  Mark for Review What's This?

Question 18 of 33

3.0 Points

If he feels the chances of low, moderate, and high demand are 30%, 30%, and 40% respectively, what is the expected annual profit for the bus that he will decide to purchase?

  A. $15,000

  B. $61,000

  C. $69,000

  D. $72,000

  E. $87,000

Reset Selection

  Mark for Review What's This?

Question 19 of 33

3.0 Points

If he feels the chances of low, moderate, and high demand are 30%, 30%, and 40% respectively, what is his expected value with perfect information?

  A. $15,000

  B. $61,000

  C. $69,000

  D. $72,000

  E. $87,000

Reset Selection

  Mark for Review What's This?

Question 20 of 33

3.0 Points

If he feels the chances of low, moderate, and high demand are 30%, 30%, and 40% respectively, what is his expected value of perfect information?

  A. $15,000

  B. $61,000

  C. $69,000

  D. $72,000

  E. $87,000

DEMAND LOW MIEDIUM HIGH 50 40 20 Bus 11s Small Medium Large 60 80 50 70 90 120 20

Explanation / Answer

D. either small or medium

D. either small or medium

Related Questions

Navigate

• Browse (All)
• Browse U
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.