The Operations Manager for a Local Bus Company Wants to Decide

question 170

Multiple Choice

The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, medium, or high, as follows:

If he feels the chances of low, medium, and high demand are 30 percent, 30 percent, and 40 percent respectively, what is his expected value of perfect information?

• A)$15,000
• B)$61,000
• C)$69,000
• D)$72,000
• E)$87,000

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Definitions:

Continuous Process Improvement

An ongoing effort to enhance products, services, or processes through incremental and breakthrough improvements.

Successful Workplace

An organizational environment that achieves its goals efficiently while maintaining high levels of employee satisfaction and engagement.

Performance Planning

The process of setting performance expectations and goals for teams or individuals to guide desired outcomes.

Policy Making

The process of creating rules, laws, or guidelines that govern the behavior of individuals and organizations.