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 is the EVPI?
A)$5.8
B)$6.6
C)$1.6
D)$3.2

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 is the EVPI?
A)$5.8 
B)$6.6 
C)$1.6 
D)$3.2

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 is the EVPI?
A)$5.8 
B)$6.6 
C)$1.6 
D)$3.2

A Plant Manager Considers the Operational Cost Per Hour of Five