A Manager Has Learned That Annual Profits from Four Alternatives

question 43

Essay

A manager has learned that annual profits from four alternatives being considered for solving a capacity problem are projected to be $15,000 for A,$30,000 for B,$45,000 for C,and $60,000 for D if state of nature 1 occurs; and $60,000 for A,$80,000 for B,$90,000 for C,and $35,000 for D if state of nature 2 occurs.
(i)If P(State of Nature 1)is .40,what alternative has the highest expected monetary value?
(ii)Determine the range of P(S2)for which each alternative would be optimal.

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Definitions:

Thomas Paine

An influential thinker and author of the 18th century, best known for his works "Common Sense" and "The American Crisis," which advocated for American independence from Britain.

Lockean Liberalism

A political philosophy based on the writings of John Locke, emphasizing individual rights, the rule of law, and the idea that government should be based on the consent of the governed.

Popular Democracy

A form of democracy that emphasizes the role of the people in governance and decision-making processes, often through direct participation or referendums.

Ratification

The official way to confirm something, usually by vote. It is the formal validation of a proposed law.