Humber Tech is considering starting either a small, regular, or large tech store in Etobicoke. The type of store they open depends on the city's market potential which may be high with 40% chance, medium with 30% chance, or low with 30% chance. The potential profits ($) in each case are shown in the payoff table below

	High	Medium	Low
Small	4500	4800	0
Regular	5700	5500	-1000
Large	6100	3500	-300

Part A 1. What is the best expected payoff and the corresponding decision using the Expected Monetary Value (EMV) approach? ______$.

1. Small b) regular c) large

2. What is the expected value of perfect information (EVPI)? _______$.

Part B

Humber Tech is now considering hiring ALBION consultants for information regarding the city's market potential. ALBION Consultants will give either a favourable (F) or unfavourable (U) report. The probability of ALBION giving a favourable report is 0.45. If ALBION gives a favourable report, the probability of high market potential is 0.52 while the probability of a low market potential is 0.08. If ALBION gives an unfavourable report, the probability of high market potential is 0.16 and that of low market potential 0.48.

1. If ALBION gives a favourable report, what is the expected value of the optimal decision? _______$.
2. If ALBION gives an unfavourable report, what is the expected value of the optimal decision? _______$
3. What is the expected value with sample information (EVwSI) provided by ALBION? _______$
4. What is the expected value of the sample information (EVSI) provided by ALBION? _______$
5. What is the expected value of the sample information (EVSI)provided by ALBION? _______$
6. What is the efficiency of the sample information? Round % to 1 decimal place. _______$