Considering the following decision tree, what is the EV atnode 3?Assume the payoffs are COST values. **Enter thenumber only** P(F) = 0.6 P(U) = 0.4 P(s1 | F) = 0.75 P(s1 |U)=0.55 P(s2 | F) = 0.25 P(s2 | U) = 0.45 P(s1) = 0.7 P(S2) =0.31MarketResearchNo MarketResearchF**Enter the number only**d₂2d₂(10)5₁5₂5₁5₂45₂5₁SBOYS₁100300400200100300400200100300400200

Here, the prior probabilities and posterior probabilities are given.Prior Probability:Posterior…

Answered: Considering the following decision…

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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2. A toy manufacturer has three different mechanisms that can be installed in a doll that it sells. The different mechanisms have three different setup costs (overheads) and variable costs and, therefore, the profit from the dolls is dependent on the volume of sales. The anticipated payoffs are as follows. Light Demand 0.25 $325,000 $300,000 -$400,000 Heavy Demand 0.3 Probability Wind-up action Pneumatic action Electrical action Moderate Demand 0.45 $190,000 $420,000 S170,000 $400,000 $800,000 $240,000 a. What is the EMV of each decision alternative? b. Which action should be selected? c. What is the expected value with perfect information? d. What is the expected value of perfect information? e. What is the expected opportunity loss?
Given the following decision tree, calculate the EMV and the best decision that should be made. Office Growth BUILD EXPAND a. EMV: $393000; Decision: Build Ob. EMV: $522000; Decision: Build OC. EMV: $915000; Decision Expand and Build Od EMV: $393000; Decision: Expand High Demand Low Demand High Demand Low Demand 60% Probability $650,000 Impact 40% Probability $330,000 Impact 70% Probability $510,000 Impact 30% Probability $120,000 Impact
Leo Fattel, a toy manufacturer, has three different mechanisms that can be installed in a doll that it sells. The different mechanisms have three different setup costs (overheads) and variable costs and, therefore, the profit from the dolls is dependent on the volume of sales. The anticipated payoffs are as follows. The anticipated payoffs are as follows. What is the expected value of perfect information? Light Demand Moderate Demand Heavy Demand Probability 0.25 0.45 0.3 Wind-up action $325,000 $190,000 $170,000 Pneumatic action $300,000 $420,000 $400,000 Electrical action -$400,000 $240,000 $800,000 Group of answer choices
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Payoff Table Decision Alternatives Demand Low Medium High Small, d1 400 500 600 Medium, d2 100 600 800 Large, d3 -300 400 1200 1). If nothing is known about the demand probabilities, what are the recommended decision using the Maximax (optimistic), Maximin (pessimistic) and Equally Likely? 2). If P(low) = 0.20, P(medium) = 0.35, and P(high) = 0.45. What is the recommended decision using the expected monetary value approach? 3). What is the expected value of perfect information (EVPI)?
* 00 T 35 R Miles used the information on the table to develop a Decision Tree for this situation and indicate which type of truck should he select. What would Miles's decision be based on Baye's Decision Rule? $16,000 3. $19,000 2 $21,000 $15,000 .5 Compact 000'0 000 $24,000 2. Full-size .2 000 0 Subcompact Can't be determined with the information provided Compact All of the answer choices are correct Full size MacBook Air 000 000 DD F7 F2 F3 F5 F8 F4 & $ 9. 7. 4. J K
Lakewood Fashions must decide how many lots of assorted ski wear to order for its three stores. Information on pricing, sales, and inventory costs has led to the following payoff table, in thousands. Order size Low 2 lots 1 lot 1 lot 3 lots (a) Show a regret table. Order size 2 lots 3 lots 11 9 6 Low Demand Medium 16 24 36 High 16 36 64 Demand Medium (b) What decision should be made by the optimist? O 1 lot O2 lots 3 lots (c) What decision should be made by the conservative? O 1 lot O2 lots 3 lots (d) What decision should be made using minimax regret? O 1 lot O2 lots O3 lots High Maximum Regret

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