A city in Ohio is considering replacing its fleet of gasoline-powered automobiles with electric cars. The manufacturer
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The city’s consultant believes that the results of the pilot program would be significant but not conclusive; she submits the values in the file P06_72.xlsx, a compilation of probabilities based on the experience of other cities, to support her contention. For example, the first row of her table indicates that given that a conversion to electric cars actually results in a savings of $1.5 million, the conditional probabilities that the pilot program will indicate that the city saves money, loses money, and breaks even are 0.6, 0.1, and 0.3, respectively. What actions should the city take to maximize its expected savings? When should it run the pilot program, if ever?
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Data Analysis and Decision Making
ISBN: 978-0538476126
4th edition
Authors: Christian Albright, Wayne Winston, Christopher Zappe
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