D 1 2 3 4 5 6 7 Appal Computers Co.(ACC) manufactures memory chips in lots of 10 chips. From their past experience, ACC knows that 80% of their lots contain only 10 % defective chips (1 on 10, good lot) and 20 % of their lots contain 50% (5 on 10, bad lot) defective chips. ACC can use the following decisions at their disposal as given below. If a good lot of chips is sent to the next stage of production then the processing costs are $10000 per lot and if a bad lot is sent for the next stage of production then the processing costs are $40000 per lot. After manufacturing a lot, ACC can also blindly rework a lot for a cost of $10000 and the outcome of a reworked lot is always a good lot. Alternatively, ACC can test a chip from a lot and guess if it's a good or a bad lot at a cost of $1000 per lot. 8 9 10 11 12 3 1 Answer the following questions: 1) From the past experience of ACC, draw the Baye's Tree and find the posterior probabilities: P(Good Lot | a chip is defective) and P(Bad Lota chip is not defective) ? Interpret your result. (3M) 2) Draw the decision tree and use a backward-pass to get the EMV's at various nodes? What is the best decision for ACC? (3M) 3) Find the EVSI and interpret it? (2M) 4) Draw the payoff cost matrix for the above problem with Decisions along rows and States of Nature along the columns. If a clairvoyant is available at your disposal then what is the EVPI here and its interpretation? (2M) Instructions Q1 Q2 Q3 Q4 + O O Type here to search TE