1 operations research 2The following is the payoff profit matrix for two alternate plans:FUTURESp(0.75)ALTERNATIVES Market Receptive Market UnFavorablep(0.25)Plan A$20,000$6,000Plan B$25,000$3,0001. Which plan do you recommend adopting using the expected value criterion2. What is the expected value of perfect information?3. If it is known from past experience that of all the cases was receptive, a research company predicted itin 85 percent of the cases. In the other 15 percent they predicted an unfavorable market. Also, of allthe cases when the market proved to be unfavorable the research company predicted it correctly in80% of the cases.(The other 20% of the cases they predicted it incorrectly.) Find the revisedprobabilities of all states of nature.4. Using the posterior probabilities, which plan would you recommend now?5. How much should one be willing to pay (EVSI) for the research survey?

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Answered: operations research 2 The following is…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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