An operations manager's staff has compiled the information below for four manufacturing alternatives (E,F,G,and H)that vary by production technology and the capacity of the machinery.All choices enable the same level of total production and have the same lifetime.The four states of nature represent four levels of consumer acceptance of the firm's products.Values in the table are net present value of future profits in millions of dollars.Forecasts indicate that there is a 0.1 probability of acceptance level 1,0.2 chance of acceptance level 2,0.4 chance of acceptance level 3,and 0.3 change of acceptance level 4.
Using the criterion of expected monetary value,which production alternative should be chosen?
Definitions:
Blood Type
A classification of human blood based on the presence or absence of antibodies and inherited antigenic substances on the surface of red blood cells.
Probability Assignment
An academic or educational task involving the calculation or analysis of probabilities concerning certain events or scenarios.
Legitimate
Something that is lawful, justified, and recognized as valid or conforming to established rules and standards.
Joint Frequency Distribution
A statistical representation showing the frequency of combined occurrences of two or more variables.
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