27 An employee has been asked to decide which machine to choose from four possibilities. The purchase and installation cost for each machine is identical. The board of directors will support the employee's position s long as it is ensured that there is no likelihood of a reduction in productivity with the new machine. The decision tree below describes the conditions and expected values. Save Which machine to purchase? Which machine to purchase? Save Machine A O Machine D O Machine B O Machine A O Machine C Machine B Machine S Machine ( Increase productivity $100,000 Increase productivity $50,000 Increase productivity $100,000 No increase in productivity Increase productivity $80,000 fecrease productivity $25,000 Increase productivity $250,000 Decrease productivity son Machine C Machine D Probability 0.25 Probability 0.75 Probability 0.50 Probability 01.50 Probability 0.40 Probability 0.60 Probability 0.25 Probability 0.75 No increase in productivity Increase productivity $50,000 Increase productivity $25,000 Increase productivity $250,000 Decrease productivity $50,000 $62,500 $50,000 $35,000 $100,000 Probability 0.50 Probability 0.40 Probability 0.60 Probability 0.25 Probability 0.75 $35,000 $100,000 Which machine should this employee select to assure the board of directors that there is no likelihood of a reduction in productivity?
27 An employee has been asked to decide which machine to choose from four possibilities. The purchase and installation cost for each machine is identical. The board of directors will support the employee's position s long as it is ensured that there is no likelihood of a reduction in productivity with the new machine. The decision tree below describes the conditions and expected values. Save Which machine to purchase? Which machine to purchase? Save Machine A O Machine D O Machine B O Machine A O Machine C Machine B Machine S Machine ( Increase productivity $100,000 Increase productivity $50,000 Increase productivity $100,000 No increase in productivity Increase productivity $80,000 fecrease productivity $25,000 Increase productivity $250,000 Decrease productivity son Machine C Machine D Probability 0.25 Probability 0.75 Probability 0.50 Probability 01.50 Probability 0.40 Probability 0.60 Probability 0.25 Probability 0.75 No increase in productivity Increase productivity $50,000 Increase productivity $25,000 Increase productivity $250,000 Decrease productivity $50,000 $62,500 $50,000 $35,000 $100,000 Probability 0.50 Probability 0.40 Probability 0.60 Probability 0.25 Probability 0.75 $35,000 $100,000 Which machine should this employee select to assure the board of directors that there is no likelihood of a reduction in productivity?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter5: Network Models
Section5.3: Assignment Models
Problem 12P
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