The Quality Control Manager for NKA Inc

question 12

Short Answer

The quality control manager for NKA Inc. must decide whether to accept (alternative 1), further analyze (alternative 2), or reject (alternative 3) an incoming shipment (lot) of microchips. The historical data indicate that there is a 30 percent chance that the lot is poor quality (S₁), 50 percent chance that the lot is fair quality (S₂), and 20 percent chance that the lot is good quality (S₃). Assume the following payoff table is available. The values in the payoff table are in thousands of dollars.
What is the maximum amount that the quality control manager would be willing to pay for perfect information?

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Definitions:

Official Sources

Refers to information provided by government entities, accredited institutions, or recognized expert organizations.

Predator Principle

A concept in ecological or social systems where dominant entities exploit or consume resources at the expense of others, maintaining balance or hierarchy.

Liberty

The condition of having freedom in society from authoritarian-imposed limitations on one's lifestyle, actions, or political beliefs.

Prevent Harm

Efforts or actions taken to avoid damage, injury, or negative outcomes.