# In Problem 36, the Blue Sox general manager has asked a superscout to assign a probability to

## Question:

In Problem 36, the Blue Sox general manager has asked a superscout to assign a probability to each of the three states of nature for the pitchers during the next 10 years. The scout estimates there is a .10 probability that these pitchers at this stage of their careers will have no injuries, a .60 probability that they will have a career with the normal number of injuries, and a .30 probability that they will have excessive injuries.

a. Using expected value, determine the best pitcher to sign.

b. Given the following 10-year contract price for each pitcher (in $millions), which would you recommend signing?

Jose Diaz ………… $ 97.3

Jerry Damon ……… $121.5

Frank Thompson ….. $ 73.5

Derek Rodriguez … $103.4

Ken Griffin ………. $ 85.7

c. Suppose that the general manager asked the superscout to determine the probabilities of each state of nature for each individual pitcher, and the results were as follows:

Determine the expected number of wins for each pitcher, and combined with the contract price in part b, indicate which pitcher you would recommend signing.

## Step by Step Answer:

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