A Manager Is Quite Concerned About the Recent Deterioration of a Section

question 20

Short Answer

A manager is quite concerned about the recent deterioration of a section of the roof on a building that houses her firm's computer operations. According to her assistant there are three options which merit consideration: A, B, and C. Moreover, there are three possible future conditions that must be included in the analysis: I, which has a probability of occurrence of .5; II, which has a probability of .3; and III, which has a probability of .2.
If condition I materializes, A will cost $12,000, B will cost $20,000, and C will cost $16,000. If condition II materializes, the costs will be $15,000 for A, $18,000 for B, and $14,000 for C. If condition III materializes, the costs will be $10,000 for A, $15,000 for B, and $19,000 for C.
(A) Draw a decision tree for this problem.
(B) Using expected monetary value, which alternative should be chosen?

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Definitions:

Ventral Respiratory Group

A cluster of neurons in the medulla oblongata that plays a critical role in controlling breathing.

Inspiration

Inspiration refers to the process of taking air into the lungs, a vital component of respiration, driven by muscle contraction and negative pressure inside the chest.

Ventral Respiratory Group

A cluster of neurons in the brainstem that play a crucial role in controlling voluntary and involuntary breathing.

Intercostal Nerves

The nerves that run between the ribs and are responsible for conveying information to and from the thoracic area of the chest.