The Accompanying Figure Shows the Decision Tree of an Operations

question 11

Multiple Choice

The accompanying figure shows the decision tree of an operations manager who is considering a new production technique. ER represents his expected return (in thousand $) from the new technique. If he does not adopt the technique his expected return would be zero. The probabilities of the technique being a success or a failure are .7 and .3 respectively. Compute the expected return (in thousand $) from the adoption of the new production technique.

• A) $8,400
• B) $1,000
• C) -$2,000
• D) $7,200
• E) $8,000

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Definitions:

Attention Valued Resources

The concept that resources which attract and hold attention are considered valuable in a society or market.

Master Status

A term in sociology referring to the status of an individual that dominates all other statuses they hold, shaping their entire life.

Status Cues

Signals or indicators that convey an individual's social position, wealth, or role within a group.

Women Laugh

denotes the act or expression of laughter by females, often studied in social and psychological contexts to understand gender differences in humor and expression.