Question: A machine shop owner is attempting to decide whether to purchase a new drill press, a lathe, or a grinder. The return from each will
A machine shop owner is attempting to decide whether to purchase a new drill press, a lathe, or a grinder. The return from each will be determined by whether the company succeeds in getting a government military contract. The profit or loss from each purchase are shown in the following payoff table: Purchase Contract No Contract Drill Press Lathe Grinder $40000 $-8000 $20000 $8000 $12000 $10000 Perform the sensitivity analysis for this decision problem. (Let p be the probability of getting a contract. Determine which alternative should be chosen at which values of p).
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