The owner of the Rwanda Computer Company must decide among building 100 servers building 5000 hard drives or leasing all their

Question

The owner of the Rwanda Computer Company must decide among building 100 servers building 5000 hard drives or leasing all their equipment to another company The profit that will result from each alternative will be determined by whether material costs remain stable increase moderately or increase significantly The specialists calculated the likelihood for each possible level of material costs In the payoff table below the estimated profit losses are given in thousands Servers Hard Drives Leasing Probability of State of lature Decision EMV Hard Drives Select an answer V Stable 1830 1900 EVPI 550 e Please interpret EVPI 0 3 Material Costs Moderate Increase 1010 a Compute the expected monetary value for each decision EMV Servers c Find the expected value with perfect information EVWPI 500 900 EMV Leasing b Using Expected Monetary Value criterion select the best decision 0 4 d Determine the expected value of perfect information Significant Increase 170 2400 850 0 3 O EVPI is the average amount the company would pay for additional information O EVPI is the usual amount the company would pay for additional information O EVPI is the maximum amount the company would pay for additional information O EVPI is the minimum amount the company would pay for additional

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