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GRAN Ltd is seeking to make a decision regarding the size of a new facility to construct to meet growing demands. It considers three states
GRAN Ltd is seeking to make a decision regarding the size of a new facility to construct to meet growing demands. It considers three states of nature that are likely to occur and the possible payoffs associated with each decision alternative. Table 1 Decision Pay-off Table Alternatives Low Demand Moderate Demand High Demand Small Facility -70,000 -10,000 30,000 Medium Facility -40,000 23,000 40,000 Large Facility -30,000 12,000 100,000 Do nothing 0 0 0 The Expected Value with Perfect Information (EVwPI) in this scenario given that probabilities of low, moderate, and high demand are .30, .45, and .25, respectively is closest to: Question 7Answer A. $10,350 B. $13,950 C. $0 D. $35,350
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