A concessionaire for the local ballpark has developed a table of conditional values for the various alternatives (stocking decision)and states of nature (size of crowd).All values are in US Dollars.
If the probabilities associated with the states of nature are 0.30 for a large crowd, 0.50 for an average crowd, and 0.20 for a small crowd, determine:
(a)the alternative that provides the greatest expected monetary value (EMV).
(b)the expected value of perfect information (EVPI).

Question

A concessionaire for the local ballpark has developed a table of conditional values for the various alternatives (stocking decision)and states of nature (size of crowd).All values are in US Dollars.
  If the probabilities associated with the states of nature are 0.30 for a large crowd, 0.50 for an average crowd, and 0.20 for a small crowd, determine:
(a)the alternative that provides the greatest expected monetary value (EMV).
(b)the expected value of perfect information (EVPI).

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The Answer of A concessionaire for the local ballpark has developed a table of conditional values for the various alternatives (stocking decision)and states of nature (size of crowd).All values are in US Dollars.
  If the probabilities associated with the states of nature are 0.30 for a large crowd, 0.50 for an average crowd, and 0.20 for a small crowd, determine:
(a)the alternative that provides the greatest expected monetary value (EMV).
(b)the expected value of perfect information (EVPI).

A Concessionaire for the Local Ballpark Has Developed a Table