# Question: In the SciTools example you might argue that there is

In the SciTools example, you might argue that there is a continuum of possible low competitor bids (given that there is at least one competing bid), not just four possibilities. In fact, assume the low competitor bid in this case is normally distributed with mean $118,000 and standard deviation $4500. Also, assume that SciTools will still either not bid or bid $115,000, $120,000, or $125,000. Use Excel’s NORMDIST function to find the EMV for each alternative. Which is the best decision now? Why can’t this be represented in a decision tree?

**View Solution:**## Answer to relevant Questions

In a tree built with Precision Tree, there are two blue values at each end node, the top one of which is a probability. Why are so many of these probabilities 0 in the finished tree in Figure 6.9? What do the remaining ...Explain in words what information a two-way sensitivity chart, such as the one in Figure 6.27, provides. Demonstrate how you could provide this same information without Precision Tree’s sensitivity tools, using only data ...In deciding whether to perform mandatory drug testing, we claimed that it is difficult to justify such testing under reasonable conditions. Check this yourself in the following questions.a. Drug testing ought to be more ...The concept behind EVPI is that you purchase perfect information (the envelope), then open the envelope to see which outcome occurs, and then make an easy decision. You do not, however, get to choose what information the ...Consider an investor with $10,000 available to invest. He has the following options regarding the allocation of his available funds: (1) He can invest in a risk-free savings account with a guaranteed 3% annual rate of ...Post your question