Quiz 3 - Sample Information Progress saved Submit and Score: 6.61/30 3/7 answered Question 3 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 20% chance, medium with 20% chance, or low with 60% chance. The potential profits ($) in each case are shown in the payoff table below. High Medium Low Small 5000 4700 1000 Regular 6000 5200 -500 Large 6200 4000 -100 Part A 1. What is the best expected payoff and the corresponding decision using the Expected Monetary Value (EMV) approach? $ Select an answer v) 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 0.4. If ALBION gives a favourable report, the probability of high market potential is 0.4 while the probability of a low market potential is 0.18. If ALBION gives an unfavourable report, the probability of high market potential is 0.04 and that of low market potential 0.8. 1. If ALBION gives a favourable report, what is the expected value of the optimal decision? 5 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? S 4. What is the expected value of the sample information (EVSI) provided by ALBION? S 5. Based on the EVSI, should Humber Tech pay $200 for the sample information? Select an answer 6. What is the efficiency of the sample information? Round % to 1 decimal place