2. If the repairer believes that machine 2 is satisfactory, there is a 60% chance that its...

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2. If the repairer believes that machine 2 is satisfactory, there is a 60% chance that its annual maintenance cost will be $0 and a 40% chance it will be $100. If the repairer believes that machine 2 is unsatisfactory, there is a 20%

chance that the annual maintenance cost will be $0, a 40%

chance it will be $100, and a 40% chance it will be $200.

If there is a 50% chance that the repairer will give a satisfactory report, what is EVSI? If the repairer charges

$40, what should the decision sciences department do? What is EVPI?

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