A plant manager considers the operational cost per hour of five machine alternatives.The cost per hour is sensitive to three potential weather conditions: cold, mild, and warm.The following table represents the operations cost per hour for each alternative-state of nature combination: Assume that for a randomly selected day, there is a 30% probability of cold weather, 50% probability of mild weather, and 20% probability of warm weather.What alternative is best using EMV?
A)Machine 1
B)Machine 2
C)Machine 3
D)Machine 4

Question

A plant manager considers the operational cost per hour of five machine alternatives.The cost per hour is sensitive to three potential weather conditions: cold, mild, and warm.The following table represents the operations cost per hour for each alternative-state of nature combination:  Assume that for a randomly selected day, there is a 30% probability of cold weather, 50% probability of mild weather, and 20% probability of warm weather.What alternative is best using EMV?
A)Machine 1 
B)Machine 2 
C)Machine 3 
D)Machine 4

Quizplus · Accepted Answer

The Answer of A plant manager considers the operational cost per hour of five machine alternatives.The cost per hour is sensitive to three potential weather conditions: cold, mild, and warm.The following table represents the operations cost per hour for each alternative-state of nature combination:  Assume that for a randomly selected day, there is a 30% probability of cold weather, 50% probability of mild weather, and 20% probability of warm weather.What alternative is best using EMV?
A)Machine 1 
B)Machine 2 
C)Machine 3 
D)Machine 4

A Plant Manager Considers the Operational Cost Per Hour of Five