Determine best supplier for company using expected value

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Leevi Starch in Problem S1-7 estimates that the probabilities of future global changes in oil prices are 0.09 that they will decrease, 0.27 that they will remain the same, and 0.64 that they will decrease.

a. Determine the best supplier for the company using expected value.

b. If the company wants to hire an energy analyst to help it determine more accurately what future oil prices will do, what is the maximum amount it should pay the analyst?

Reference no: EM13843057

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