At a Decision Point in a Decision Tree, Which Machine

question 19

Multiple Choice

At a decision point in a decision tree, which machine would you select when trying to maximize payoff when the anticipated benefit of selecting machine A is $45,000, with a probability of 90%; the expected benefit of selecting machine B is $80,000, with a probability of 50%; and the expected benefit of selecting machine C is $60,000, with a probability of 75%?

• A) Machine A
• B) Machine B
• C) Machine C
• D) You would be indifferent between machines A and C.
• E) You would be indifferent between machines A and B.

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Definitions:

Customer Service

The support and assistance provided by a company to those who buy or use its products or services.

Logistics Management

The component of supply chain management that plans, implements, and controls the efficient, effective forward, and reverse flow and storage of goods, services, and related information between the point of origin and the point of consumption.

Convenience

The quality of being easily accessible or providing time-saving benefits, often enhancing user experience or customer satisfaction.

Logistics Management

The coordination and optimization of processes for the effective and efficient transportation and storage of goods from origin to consumption.