Philip Musa can build either a large video rental section or a small one in his Birmingham drugstore. He can also gather additional information or simply do nothing. If he gathers additional information, the results could suggest either a favorable or an unfavorable market, but it would cost him $ 3,000 to gather the information. Musa believes that there is a 50– 50 chance that the information will be favorable. If the rental market is favorable, Musa will earn $ 15,000 with a large section or $ 5,000 with a small. With an unfavorable video- rental market, however, Musa could lose $ 20,000 with a large section or $ 10,000 with a small section. Without gathering additional information, Musa estimates that the probability of a favorable rental market is .7. A favorable report from the study would increase the probability of a favorable rental market to .9. Furthermore, an unfavorable report from the additional information would decrease the probability of a favorable rental market to .4. Of course, Musa could ignore these numbers and do nothing. What is your advice to Musa?
Answer to relevant QuestionsThe city of Belgrade, Serbia, is contemplating building a second airport to relieve congestion at the main airport and is considering two potential sites; X and Y. Hard Rock Hotels would like to purchase land to build a ...Green Vehicle Inc. manufactures electric cars and small delivery trucks. It has just opened a new factory where the C1 car and the T1 truck can both be manufactured. To make either vehicle, processing in the assembly shop ...Wichita’s famous Sethi Restaurant is open 24 hours a day. Servers report for duty at 3 a. m., 7 a. m., 11 a. m., 3 p. m., 7 p. m., or 11 p. m., and each works an 8- hour shift. The following table shows the minimum number ...Refer to the table that follows. a) Use the northwest- corner method to find an initial feasible solution. What must you do before beginning the solution steps? b) Use the intuitive lowest- cost approach to find an initial ...What happens if two single- server systems have the same mean arrival and service rates, but the service time is constant in one and exponential in the other?
Post your question