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Question 10 (3 points) Myrtle Air Express decided to offer direct servide from Cleveland to Myrtle Beach Management must decide between a full-price service using the company's new fleet of jet aircraft and a discount service using smaller-capacity commuter planes. It is clear that the best choice depends on the market reaction to the service Myrtle Air offers. Management developed estimates of the contribution to profit for each type of service based on three possible levels of demand for service to Myrtle Beach: strong, medium and weak. The following table shows the estimated quarterly profits (in thousands of dollars); Demand for Service Service Strong Medium Weak Full 1,000 740 -400 Price Discount 600 405 295 Suppose that management of Myrtle Air Express believes that the probabilities are 0.5 for strong, 0.2 for medium, and 0.3 for weak demand. Use the expected value approach to determine the optimal decision. What is the expected value of the optimal choice? (Round to the nearest whole
The following table shows the estimated quarterly profits (In thousands of dollars); Demand for Service Service Strong Medium Weak Full 1,000 740 -400 Price Discount 600 405 295 Suppose that management of Myrtle Air Express believes that the probabilities are 0.5 for strong, 0.2 for medium, and 0.3 for weak demand. Use the expected value approach to determine the optimal decision What is the expected value of the optimal cholce? (Round to the nearest whole number. For example, if your answer is 3.11, enter 3.) Your Answer: Answer