# Howard Weiss, Inc., is considering building a sensitive new airport scanning device. His managers believe that there is a probability of 0.4 that the ATR Co. will come out with a competitive product. If Weiss adds an assembly line for the product and ATR Co. does not follow with a competitive product, Weisss expected profit is \$40,000; if Weiss adds

Chapter 18, Problems #5
Howard Weiss, Inc., is considering building a sensitive new airport scanning device. His managers believe that there is a probability of 0.4 that the ATR Co. will come out with a competitive product. If Weiss adds an assembly line for the product and ATR Co. does not follow with a competitive product, Weiss’s expected profit is \$40,000; if Weiss adds an assembly line and ATR follows suit, Weiss still expects \$10,000 profit. If Weiss adds a new plant addition and ATR does not produce a competitive product, Weiss expects a profit of \$600,000; if ATR does compete for this market Weiss expects a loss of \$100,000.
(a) Determine the EMV of each decision
(b) Compute the expected value of perfect information.