# Question: Refer to Problem 1 Suppose after a certain amount of

Refer to Problem 1. Suppose after a certain amount of discussion, the contractor is able to subjectively assess the probabilities of low and high demand: P (low) = .3 and P (high) = .7.

a. Determine the expected profit of each alternative. Which alternative is best? Why?

b. Analyze the problem using a decision tree. Show the expected profit of each alternative on the tree.

c. Compute the expected value of perfect information. How could the contractor use this knowledge?

a. Determine the expected profit of each alternative. Which alternative is best? Why?

b. Analyze the problem using a decision tree. Show the expected profit of each alternative on the tree.

c. Compute the expected value of perfect information. How could the contractor use this knowledge?

## Answer to relevant Questions

Refer to Problems 1 and 2. Construct a graph that will enable you to perform sensitivity analysis on the problem. Over what range of P (high) would the alternative of doing nothing be best? Expand? Subcontract? Construct a graph that can be used for sensitivity analysis for the preceding problem. a. How sensitive is the solution to the problem in terms of the probability estimate of .35? b. Suppose that, after consulting with a ...Given this payoff table:.:.a. Determine the range of P (1) for which each alternative would be best, treating the payoffs as profits. b. Answer part a treating the payoffs as costs.Briefly describe the two main layout types. What are the trade-offs that occur when a process layout is used? What are the trade-offs that occur when a product layout is used?Post your question