Decision analysis with sample information/expected value/utility analysis/quantitative methodsProblem:A television network has been receiving low ratings for its programs. Currently, management is considering two alternatives for the Monday night 8:00 pm-9 pm time slot: a western with a well-known star...(there is more). The television network has been receiving low ratings for its programs. Currently, management is considering two alternatives for the Monday night 8:00 pm-9 pm time slot: a western with a well-known star, or a musical variety with a relatively unknown husband and wife team. The percentages of viewing audience estimates depend on the degree of program acceptance. The relevant data are as follows.
Percentage of Viewing Audience
Program Acceptance Western Musical Variety
High 30% 40%
Moderate 25% 20%
Poor 20% 15%
The probabilities assocaiated with program acceptance levels are as follows.
Probability
Program Acceptance Western Musical Variety
High .30 .30
Moderate .60 .40
Poor .10 .30
Answers provided to question. Need problems worked out to show how I arrived at answer for A,
A. Using the expected value approach, which program should the network choose?
answer is
Western: EV =26%