Drew? Thomas, a sandwich vendor at Hard? Rock? Cafe's? annual? Rockfest, created a table of conditional values for the various?alternatives? (stocking? decision) and states of? nature? (size? of? crowd):
alternatives big average small
large stock $22,000 $10,000 -$2500
average stock $16,000 $9,000 $5,500
small sock $9,000 $8,100 3,200
The probabilities associated with the states of nature are 0.30 for a? big? demand, 0.5 for an? average? demand, and 0.20 for a small demand.
??a) The alternative that provides Andrew Thomas the greatest expected monetary value? ?is large stock
The EMV of this decision is ??$______
??b) The expected value of perfect information? ?EVPI for Andrew? Thomas? = ??$______