Using the following table, practice the Expected Monetary Value (EMV), Expected Opportunity Loss (EOL), and Expected Value of Perfect Information (EVPI). Use the .30 for the probability of a Strong Market, .50 for the probability of a Fair Market, and .20 for the probability of a Poor Market. Show your selections (highlight your best alternative). You must show your work. PROFIT ($) STRONG MARKET FAIR MARKET POOR MARKET Large facility 550,000 110,000 -310,000 Medium-sized facility 300,00 129,000 -100,000 Small facility 200,000 100,000 -32,000 No facility 0 0 0
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- Using the following table, practice the Expected Monetary Value (EMV), Expected Opportunity Loss (EOL), and
Expected Value of Perfect Information (EVPI). Use the .30 for the probability of a Strong Market, .50 for the probability of a Fair Market, and .20 for the probability of a Poor Market. Show your selections (highlight your best alternative). You must show your work.
|
|
PROFIT ($) |
||
|
|
STRONG MARKET |
FAIR MARKET |
POOR MARKET |
|
Large facility |
550,000 |
110,000 |
-310,000 |
|
Medium-sized facility |
300,00 |
129,000 |
-100,000 |
|
Small facility |
200,000 |
100,000 |
-32,000 |
|
No facility |
0 |
0 |
0 |
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- this a statistics question!!!! I am lookin for the monetary value!!!! For box a is $100,000 box b is -$55,000 box c is 0 and box d is 0 p1 = 75%p2 = 25% questions are 1. what EMV ( expected monetary value) amount do you come up with ? And what is your EMV decision ? In other words, do you build, or not?There is a 0.9991 probability that a randomly selected 29-year-old male lives through the year. A life insurance company charges $152 for insuring that the male will live through the year. If the male does not survive the year, the policy pays out $110,000 as a death benefit. Complete parts (a) through (c) below. Question content area bottom Part 1 a. From the perspective of the 29-year-old male, what are the monetary values corresponding to the two events of surviving the year and not surviving? The value corresponding to surviving the year is $negative 152−152. The value corresponding to not surviving the year is $109,848109,848. (Type integers or decimals. Do not round.) Part 2 b. If the 29-year-old male purchases the policy, what is his expected value? The expected value is $enter your response here. (Round to the nearest cent as needed.)Use the accompanying payoff table with event probabilities to answer parts (a) through (h). Question content area bottom Part 1 a. Calculate the expected monetary value (EMV) for actions A and B. EMV(A)=$enter your response here EMV(B)=$enter your response here (Type integers or decimals.) Part 2 b. Calculate the expected opportunity loss (EOL) for actions A and B. EOL(A)=$enter your response here EOL(B)=$enter your response here (Type integers or decimals.) Part 3 c. Explain the meaning of the expected value of perfect information (EVPI) in this problem. Select the correct choice below and fill in the answer box to complete your choice. (Type an integer or a decimal.) A. The EVPI value of $enter your response here represents the maximum amount that you should be willing to pay for perfect information. B. The EVPI value of $enter your response here represents the minimum amount that you should be willing to pay for…
- Specialty Toys, Inc., sells a variety of new and innovative children's toys. As with other products, Specialty faces the decision of how may Weather Teddy units to order for coming holiday season. Members of the management team suggested order quantities of 15,000, 18,000, 24,000, 28,000 units. The wide range of order quantities suggested indicates considerable disagreement concerning the market potential. The product management team ask you for analysis of the stock-out probabilities for various order quantities, an estimate of the product potential, and to help make an order quantity recommendation. Specialty expects to sell Weather Teddy for $24 based on cost of $16 per unit. If inventory remains after the holiday season, Specialty will sell all surplus inventory for $5 per unit. After reviewing the sales history of similar products, Specialty%u2019s sales forecaster predicted and expected demand of 20,000 units with a .95 probability that demand would be between 10,000 units and…Specialty Toys, Inc., sells a variety of new and innovative children's toys. As with other products, Specialty faces the decision of how may Weather Teddy units to order for coming holiday season. Members of the management team suggested order quantities of 15,000, 18,000, 24,000, 28,000 units. The wide range of order quantities suggested indicates considerable disagreement concerning the market potential. The product management team ask you for analysis of the stock-out probabilities for various order quantities, an estimate of the product potential, and to help make an order quantity recommendation. Specialty expects to sell Weather Teddy for $24 based on cost of $16 per unit. If inventory remains after the holiday season, Specialty will sell all surplus inventory for $5 per unit. After reviewing the sales history of similar products, Specialty%u2019s sales forecaster predicted and expected demand of 20,000 units with a .95 probability that demand would be between 10,000 units and…Specialty Toys, Inc., sells a variety of new and innovative children's toys. As with other products, Specialty faces the decision of how may Weather Teddy units to order for coming holiday season. Members of the management team suggested order quantities of 15,000, 18,000, 24,000, 28,000 units. The wide range of order quantities suggested indicates considerable disagreement concerning the market potential. The product management team ask you for analysis of the stock-out probabilities for various order quantities, an estimate of the product potential, and to help make an order quantity recommendation. Specialty expects to sell Weather Teddy for $24 based on cost of $16 per unit. If inventory remains after the holiday season, Specialty will sell all surplus inventory for $5 per unit. After reviewing the sales history of similar products, Specialty’s sales forecaster predicted and expected demand of 20,000 units with a .95 probability that demand would be between 10,000 units and 30,000…
- Specialty Toys, Inc., sells a variety of new and innovative children's toys. As with other products, Specialty faces the decision of how may Weather Teddy units to order for coming holiday season. Members of the management team suggested order quantities of 15,000, 18,000, 24,000, 28,000 units. The wide range of order quantities suggested indicates considerable disagreement concerning the market potential. The product management team ask you for analysis of the stock-out probabilities for various order quantities, an estimate of the product potential, and to help make an order quantity recommendation. Specialty expects to sell Weather Teddy for $24 based on cost of $16 per unit. If inventory remains after the holiday season, Specialty will sell all surplus inventory for $5 per unit. After reviewing the sales history of similar products, Specialty%u2019s sales forecaster predicted and expected demand of 20,000 units with a .95 probability that demand would be between 10,000 units and…A new product has the following profit projections and associated probabilities: Profit Probability $150,000 .10 $100,000 .25 $50,000 .20 $0 .15 -$50,00 .20 -$100,000 .10 a) use the expected value approach to decide whether to market the new product b) because of the high dollar values involved, especially the possibility of a $100,000 loss, the marketing vice president has expressed some concern about the use of the expected value approach. As a consequence, if a utility analysis is performed, what is the appropriate lottery? c) assume that the following indifference probabilities are assigned. Profit indifference Probability (p) $100,000 .95 $50,000 .70 $0 .50…If you pay the $5 price to buy one ticket for the PTK Thanksgiving fundraiser, what is the expected value (to you) of the transaction overall? Round to the nearest cent.
- A 30-year-old man pays $230 for a one-year life insurance policy with coverage of $100,000. If the probability that he will live through the year is 0.9995. What is the expected value for the company for this insurance policy? Group of answer choices a)-180 b)179.885 c)180 d)-179.885It is estimated that there are 27 deaths for every 10 million people who use airplanes. A company provides $100,000 in case of death in a plane crash. A policy can be purchased for $25. Calculate and interpret the expected value to the insurance company. A service that repairs air conditioners sells maintenance agreements for $75 a year. The average cost of repairing an air conditioner is $350 and 2 in every 100 people who purchase maintenance agreements have air conditioners that need repair. Find the service’s expected profit.Credit scorecards are used by financial institutions to help decide to whom loans shouldbe granted. An analysis of the records of one bank produced the following probabilities.ScoreLoan Performance Under 400 400 or MoreFully repaid .19 .64Defaulted .13 .04a) What proportion of loans are fully repaid?b) What proportion of loans given to scorers of less than 400 fully repay?c) What proportion of loans given to scorers of 400 or more fully repay?d) Are score and whether the loan is fully repaid independent? Explain.