Question: The following payoff table provides profits based on various possible decision alternatives and various levels of demand: The probability of low demand is 0.4, whereas

The following payoff table provides profits based on various possible decision alternatives and various levels of demand:

Alternative 1 Alternative 2 Alternative 3 LOW 80 90 50 DEMAND MEDIUM

The probability of low demand is 0.4, whereas the probability of medium and high demand is each 0.3.

a) What is the highest possible expected monetary value?
b) Calculate the expected value of perfect information for this situation.

Alternative 1 Alternative 2 Alternative 3 LOW 80 90 50 DEMAND MEDIUM 120 90 70 HIGH 140 90 150

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