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Refer to the information above. Assume that ABC Inc. has hired a marketing research firm that provided additional information regarding next year's demand. Suppose that
Refer to the information above. Assume that ABC Inc. has hired a marketing research firm that provided additional information regarding next year's demand. Suppose that the probabilities of low and high demand are assessed as follows: P(Low) = 0.4 and P(High) = 0.6.
a. Which alternative should be chosen using the expected monetary value (EMV) criterion?
b. What is the expected value under certainty?
c. What is the expected value under perfect information (EVPI)?
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