Answered step by step
Verified Expert Solution
Question
1 Approved Answer
* * Please show this in the actual graph with formula text * * The professor's example gave us the actual number for reject equipment
Please show this in the actual graph with formula text The professor's example gave us the actual number for "reject equipment" but doesn't put it on the homework so I have no idea how to calculate for it
A company has just received some stateoftheart electronic equipment from an overseas supplier. The packaging has been damaged during delivery and the company must decide whether to accept the equipment. If the equipment itself has not been damaged, it could be sold for a profit of $ However, if the batch is accepted and it turns out to be damaged, a loss of $ will be made. Rejection of the equipment will lead to no change in the companys profit. After a cursory inspection, the companys engineer estimates that there is a chance that the equipment has not been damaged. The company has another option. The equipment could be tested by a local specialist company. Their test, however, is not perfectly reliable and has only an chance of giving a correct indication.
How much would it be worth paying for the information from the test ie expected values of imperfect information
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started