Consider the following payoff table and probabilities for the states of nature: a. Choose the best alternative
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a. Choose the best alternative using decision making under risk.
b. What is the expected value of perfect information?
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Demand Level Alternative 1 $700 $700 $700 $700 -$200 $1.400 $1400 $1.400 -$1,100 $500 $2,100 $2,100 -$2,000 -$400 $1,200 $2,800 Probability 0.5 0.400.15 0.30
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a Alternative A 015 700 04 700 015 700 03 700 700 Alternative B 015 200 04 1400 015 140...View the full answer
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