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:

Emancipation Proclamation

An executive order issued by President Abraham Lincoln on January 1, 1863, declaring the freedom of all slaves in Confederate territory.

Lincoln's Position

Abraham Lincoln's stance or policy, particularly known for his leadership during the Civil War and his efforts to abolish slavery.

Slavery

A system in which individuals are owned by others, deprived of personal freedom, and compelled to perform labor or services without the right to compensation.

Raising Money

The act of collecting or acquiring funds for a specific purpose, such as for a business venture, charitable cause, or project.