Question: What is the expected value under certainty? 140 O 160 O 200 OoABC Inc. must make a decision on its current capacity for next year.


What is the expected value under certainty? 140 O 160 O 200 OoABC Inc. must make a decision on its current capacity for next year. Estimated profits (in $0005) based on next year's demand are shown in the table below. Next Yea r's Demand Alternative Low High Exp and $ 100 $200 Subcontract $50 $120 Do nothing $40 $50 Refer to the information above. Assume that ABC Inc. has hired a marketing research firm that provided additional information regarding next year's demand. Suppose that the probabilities of low and high demand are assessed as follows: PiLow) = 0.4 and P(High) = 0.6. What is the expected value under certainty? "j; 140
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