The TW manufacturing company is considering the introduction of two new products. The company can add both to the current line, neither, or just one of the two. The success of these products depends on the general economy and on the consumers reaction to the products. These reactions can be summarised as follows:

good , P(S1) = 0.30; fair, P(S2) = 0.50; or poor, P(S3) = 0.20

State of Nature

Decision S1 S2 S3

Neither 0 0 0

Product 1 only 125 65 30

Product 2 only 105 60 30

Both 220 110 40

1. Compute the expected monetary value for each decision.[ 4 marks ]
2. What decision would you recommend? [4 marks ]
3. Develop an opportunity loss table. [ 4 marks ]
4. Computed the expected opportunity loss. [4 marks ]
5. Compute the expected value of perfect information. [4 marks ]