Determine the greatest expected monetary value

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Reference no: EM131857545

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).

large avrg small

Large Inventory $22,000 $12,000 -$2,000

Average Inventory $15,000 $12,000 $6,000

Small Inventory $9,000 $6,000 $5,000

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) Draw the decision tree for this problem

Reference no: EM131857545

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