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12.13 (LG 12.3) Randall at Churchill Circuits (CC) has just received an emergency order for one of CC's special-purpose circuit boards. Five are in stock
12.13 (LG 12.3) Randall at Churchill Circuits (CC) has just received an emergency order for one of CC's special-purpose circuit boards. Five are in stock at the moment. However, when they were tested last week two were defective. Unfor- tunately, the defective circuit boards were mixed up with the three good ones. There is not enough time to retest the boards before shipment to the customer. Randall can either choose one of the five boards at random to ship to the cus- tomer or he can obtain a proven non-defective one from another plant. If the customer gets a bad board, the total incremental cost to CC is $10 000. The incremental cost to CC of getting the board from another plant is $5000. a. What is the chance that the customer gets a bad board if Randall sends one of the five in stock? b. What is the expected value of the decision to send the customer one of the five boards in stock? c. Draw a decision tree for Randall's decision. On the basis of EV, what should he do
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