Question
East West Distributing is in the process of trying to determine where it should schedule next year's production of a popular line of kitchen utensils
East West Distributing is in the process of trying to determine where it should schedule next year's production of a popular line of kitchen utensils that it distributes. Manufacturers in four different countries have submitted bids to East West. However, a pending trade bill in Congress will greatly affect the cost to East West due to proposed tariffs, favorable trading status, etc.
After careful analysis, East West has determined the cost breakdown for the four manufacturers (in thousands of dollars) based on whether or not the trade bill passes as shown in the following table.
Bill Passes | Bill Fails | |
---|---|---|
Country A | 220 | 160 |
Country B | 270 | 80 |
Country C | 190 | 190 |
Country D | 235 | 130 |
(a)
If East West estimates that there is a 38% chance of the bill passing, which country should it choose for manufacturing? (Use the expected value approach.)
Country A
Country B
Country C
Country D
(b)
Over what range of values for the "bill passing" will the solution in part (a) remain optimal? (Round your answer to four decimal places.)
As long as the probability of passing is greater than or equal to BLANK and less than or equal to BLANK the answer found in part (a) will remain optimal.
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