III. What is the expected value of sample informationIV. What is the efficiency of the survey information 7. Lawson's Department Store faces a buying decision for a seasonal product for whichdemand can be high, medium, or low. The purchaser for Lawson's can order 1, 2, or 3 lots ofthe product before the season begins but cannot reorder later. Profit projections (inthousands of dollars) are shown.State of NatureHigh DemandMedium DemandLow DemandDecision AlternativeS1Order 1 lot, diOrder 2 lots, dzOrder 3 lots, dz6080605080301007010b. At each preseason sales meeting, the vice president of sales provides a personal opinionregarding potential demand for this product. Because of the vice president's enthusiasmand optimistic nature, the predictions of market conditions have always been either"excellent" (E) or "very good" (V). Probabilities are as follows:P(s1 |E) = 0.34P(s2|E) = 0.32P(s3|E) = 0.34P(s1|V) = 0.20P(s2|V) = 0.26P(s3|V) = 0.54P(E)0.70P(V) = 0.30%3D%3D%3D

From the given data , the following are interpreted V11 = 60 V12 = 60 V13 =50 V21 =80 V22 = 80…

7. Lawson's Department Store faces a buying decision for a seasonal product for which demand can be high, medium, or low. The purchaser for Lawson's can order 1, 2, or 3 lots of the product before the season begins but cannot reorder later. Profit projections (in thousands of dollars) are shown. State of Nature High Demand Medium Demand Low Demand Decision Alternative S1 S2 Order 1 lot, di Order 2 lots, dz Order 3 lots, dz 60 60 50 80 80 30 100 70 10 b. At each preseason sales meeting, the vice president of sales provides a personal opinion regarding potential demand for this product. Because of the vice president's enthusiasm and optimistic nature, the predictions of market conditions have always been either "excellent" (E) or "very good" (V). Probabilities are as follows: P(E) = 0.70 P(V) = 0.30 P(s1|E) = 0.34 P(s2|E) = 0.32 P(s3|E) = 0.34 P(s1|V) = 0.20 P(s2 |V) = 0.26 P(s3|V) = 0.54 %3D %3D %3D %3D %3D %3D

7. Lawson's Department Store faces a buying decision for a seasonal product for which demand can be high, medium, or low. The purchaser for Lawson's can order 1, 2, or 3 lots of the product before the season begins but cannot reorder later. Profit projections (in thousands of dollars) are shown. State of Nature High Demand Medium Demand Low Demand Decision Alternative S1 S2 Order 1 lot, di Order 2 lots, dz Order 3 lots, dz 60 60 50 80 80 30 100 70 10 b. At each preseason sales meeting, the vice president of sales provides a personal opinion regarding potential demand for this product. Because of the vice president's enthusiasm and optimistic nature, the predictions of market conditions have always been either "excellent" (E) or "very good" (V). Probabilities are as follows: P(E) = 0.70 P(V) = 0.30 P(s1|E) = 0.34 P(s2|E) = 0.32 P(s3|E) = 0.34 P(s1|V) = 0.20 P(s2 |V) = 0.26 P(s3|V) = 0.54 %3D %3D %3D %3D %3D %3D

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section: Chapter Questions

Problem 68P

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