A management is faced with the problem of choosing one of three products for manufacturing. The potential demand for each product may turn out to be good, moderate or poor. The probabilities for each of the state of nature were estimated as follows : Nature of Demand Product Good Moderate Рoor 0.7 0.2 0.1 Y 0.5 0.3 0.2 0.4. 0.5 0.1 The estimated profit or loss under the three states may be taken as : 30,000 20,000 10,000 Y 60,000 30,000 20,000 40,000 10,000 - 15,000 (loss) Prepare the expected value table and advise the management about the choice of product.
A management is faced with the problem of choosing one of three products for manufacturing. The potential demand for each product may turn out to be good, moderate or poor. The probabilities for each of the state of nature were estimated as follows : Nature of Demand Product Good Moderate Рoor 0.7 0.2 0.1 Y 0.5 0.3 0.2 0.4. 0.5 0.1 The estimated profit or loss under the three states may be taken as : 30,000 20,000 10,000 Y 60,000 30,000 20,000 40,000 10,000 - 15,000 (loss) Prepare the expected value table and advise the management about the choice of product.
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section10.6: Summarizing Categorical Data
Problem 26PPS
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Transcribed Image Text:A management is faced with the problem of choosing one of three products
for manufacturing. The potential demand for each product may turn out to be good,
moderate or poor. The probabilities for each of the state of nature wère estimated as
follows :
Nature of Demand
Product
Good
Moderate
Poor
0.7
0.2
0.1
Y
0.5
0.3
0.2
0.4.
0.5
0.1
The estimated profit or loss under the three states may be taken as :
30,000
20,000
10,000
Y
60,000
30,000
20,000
40,000
10,000
- 15,000 (loss)
Prepare the expected value table and advise the management about the choice of product.
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