Utica Technology (UT) is a leader in the military watch industry. Considering the uncertainty of 2024...

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Utica Technology (UT) is a leader in the military watch industry. Considering the uncertainty of 2024 economy, UT has sufficient resources and staff to facilitate the introduction of only one new military watch project for its 2024 market. The 2024 economy is reported to be 22%, 45%, 33% for being strong, normal, weak, respectively. There are three military watch projects, "Eagle", "Flame", "Glory", being considered by UT as its 2024 military watch production choice. The profit payoffs depending upon the 2024 economy are given in the table. Project / Economy Eagle Flame Glory Strong $367,000 $127,000 $129,000 Normal $170,000 $242,000 $165,000 Weak $120,000 $200,000 $170,000 I (Question A-1) Use the conservative approach and report your recommended decision. (Question A-2) Create a regret table for UT and report your recommended decision based upon the minimax regret approach. (Question A-3) Compared the expected values of the three military watch projects and report your recommended decision based upon the expected value outcomes. (Question A-4) An economic specialist can offer perfect information service to help UT make decisions. What would be the highest price UT is willing to pay for the perfect information service offered by this specialist? Utica Technology (UT) is a leader in the military watch industry. Considering the uncertainty of 2024 economy, UT has sufficient resources and staff to facilitate the introduction of only one new military watch project for its 2024 market. The 2024 economy is reported to be 22%, 45%, 33% for being strong, normal, weak, respectively. There are three military watch projects, "Eagle", "Flame", "Glory", being considered by UT as its 2024 military watch production choice. The profit payoffs depending upon the 2024 economy are given in the table. Project / Economy Eagle Flame Glory Strong $367,000 $127,000 $129,000 Normal $170,000 $242,000 $165,000 Weak $120,000 $200,000 $170,000 I (Question A-1) Use the conservative approach and report your recommended decision. (Question A-2) Create a regret table for UT and report your recommended decision based upon the minimax regret approach. (Question A-3) Compared the expected values of the three military watch projects and report your recommended decision based upon the expected value outcomes. (Question A-4) An economic specialist can offer perfect information service to help UT make decisions. What would be the highest price UT is willing to pay for the perfect information service offered by this specialist?

Answer rating: 100% (QA)

Solution Question A1 Conservative Approach The conservative approach involves selecting the project with the highest profit payoff in the most likely ... View the full answer