Compute the expected value of perfect information

Assignment Help Operation Management

Reference no: EM13100629

The local operations manager for the IRS must decide whether to hire 1, 2, or 3 temporary workers. He estimates that net revenues will vary with how well taxpayers comply with the new tax code. The following pay table is given in thousands of dollars (e.g. 50 - $50,000). The # of workers are 1, 2, 3, the respective payoff for low compliance are 50, 100 and 150, for medium compliance are 50, 60, 70, and for high compliance 50, 20 and -10. If he thinks the chance of low, medium, and high compliance are 20%, 30% and 50% respectively, what is the expected value of perfect information? Note: Please express your answer as a whole number in thousands of dollars (e.g. 50 = $50,000).

Reference no: EM13100629

Questions Cloud

Probabilities regarding house sales : A nationwide real estate company claims that its average time to sell a home is 57 days. Suppose it is known that the standard deviation of selling times is 12.3 days and that selling times are normally distributed.

Determine criterion of expected monetary value : XYZ Coating Company has reviewed four new processes for improving its coating line. The four processes, labeled A, B, C, and D, use different technology and have different capacities. All have the same level of production and lifetime.

Information regarding normal approximation to binomial : You attempt a 50 item (n = 50) true-and-false exam. You did not study for the material and your attempt to answer any item is a guess, with a 50% chance that you will get any item correct. You need a score of 30 or better to pass the exam.

At what speed is the internal energy of the system changing : A perfectly insulated system has work done by it at a rate of 13 W. At what rate is the internal energy of the system changing?

Compute the expected value of perfect information : The local operations manager for the IRS must decide whether to hire 1, 2, or 3 temporary workers. He estimates that net revenues will vary with how well taxpayers comply with the new tax code.

At what rate is the internal energy of the system changing : A system has a heat source supplying heat at a rate of 187 W and is doing work at a rate of 130.899998 W. At what rate is the internal energy of the system changing.

Determine the upper control limit for an r chart : Twenty samples of subgroup size 3 (n=3) were collected for a variable measurement. Determine the upper control limit (UCL) for an R-chart.

What is the minimum efficient scale in this industry : What is the long-run equilibrium price in this market? Explain intuitively, in your own words, why this is the long-run equilibrium. What is the long-run market equilibrium quantity?

Explain sigficance of information literacy : In your own words explain "Information Literacy" and its sigficance to you. In your own words explain the Deep Web, also called as Hidden or Invisible Web, and why it is significant to you as a student?

User Account

All Pages