A plant manager considers the operational cost per hour of five machine alternatives. The cost per hour is sensitive to

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A Plant Manager Considers The Operational Cost Per Hour Of Five Machine Alternatives The Cost Per Hour Is Sensitive To 1 (56.4 KiB) Viewed 229 times

A plant manager considers the operational cost per hour of five machine alternatives. The cost per hour is sensitive to three potential weather conditions: cold, mild, and warm. The following table represents the cost of the operations per hour for each alternative state of nature combination. Assume that for a randomly selected day, there is a 30% probability of cold weather, 50% probability of mild weather, and 20% probability of warm weather. What is the EVPI? States of Nature Weather related cost per hour Alternatives Cold cost/day Mild cost/day Warm cost/day Machine 1 $50 $40 $45 Machine 2 $45 S42 $47 Machine 3 $40 $35 $54 Machine 4 $60 $25 $48 Machine 5 $45 $40 $45 Select one: a. $1.6 b. $3.2 C. $6.6 d. 558