A Plant Manager Considers the Operational Cost Per Hour of Five

Multiple Choice

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 operations cost 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?

A) $5.8
B) $6.6
C) $1.6
D) $3.2
E) $7.4