Using Decision Making under Risk (Use Sheet 1 and rename it to Lastname_Risk) (a) What alternative will JayZee Electronics choose? How much is the payoff? (b) Additional information is being offered by a 3rd party marketing company. The additional information costs $100,000. Will JayZee pay such amount? Why or why not?

Practical Management Science
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Author:WINSTON, Wayne L.
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Chapter2: Introduction To Spreadsheet Modeling
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Using Decision Making under Risk (Use Sheet 1 and rename it to Lastname_Risk)
(a) What alternative will JayZee Electronics choose? How much is the payoff?
(b) Additional information is being offered by a 3rd party marketing company. The additional
information costs $100,000. Will JayZee pay such amount? Why or why not?
Transcribed Image Text:Using Decision Making under Risk (Use Sheet 1 and rename it to Lastname_Risk) (a) What alternative will JayZee Electronics choose? How much is the payoff? (b) Additional information is being offered by a 3rd party marketing company. The additional information costs $100,000. Will JayZee pay such amount? Why or why not?
Size of the Warehouse
Good Market ($)
Fair Market ($)
Poor Market ($)
Small
40,000
18,000
-10,000
Medium
80,000
90,000
-20,000
Large
Very Large
100,000
350,000
175,000
-40,000
-160,000
25,000
Probabilities
0.35
0.45
0.20
Transcribed Image Text:Size of the Warehouse Good Market ($) Fair Market ($) Poor Market ($) Small 40,000 18,000 -10,000 Medium 80,000 90,000 -20,000 Large Very Large 100,000 350,000 175,000 -40,000 -160,000 25,000 Probabilities 0.35 0.45 0.20
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