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The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company.
The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, moderate, or high, as follows. Bus Low Demand Medium 60 High 70 50 40 80 90 Small Medium Large Prior Probability 20 50 120 0.3 0.3 0.4 What is his expected value of perfect information? Multiple Choice $15,000 O $69,000 $61,000 $72,000 $87,000
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