Question: In Problem 9.33, the issue is whether or not to close the plant. If your boss knew exactly how many machines would fail during your

In Problem 9.33, the issue is whether or not to close the plant. If your boss knew exactly how many machines would fail during your absence; he would be able to decide what to do without the fear of making a mistake.

a. Find his EVPI concerning the number of machine failures during your absence over the next 2 weeks.

b. Suppose that the cost of repairing the broken machines is $30,000.Then what is EVPI?

c. Suppose that the cost of repairing the machines is $15,000 but the cost of closing the plant is $20,000. Now calculate EVPI.

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