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A Decision-Maker Has Decided to Expand Her Operations and Become

Question 35

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A decision-maker has decided to expand her operations and become more efficient.Decision variable d1 is to do nothing; d2 is a moderate expansion; and d3 is a major expansion. A decision-maker has decided to expand her operations and become more efficient.Decision variable d<sub>1</sub> is to do nothing; d<sub>2</sub> is a moderate expansion; and d<sub>3</sub> is a major expansion. a.Determine the expected value of d<sub>2</sub> if the states of nature are S<sub>1</sub> = 0.25; S<sub>2</sub> = 0.60; and S<sub>3</sub> = 0.15. b.Determine the expected value for d<sub>3</sub> if the states of nature are S<sub>1</sub> = 0.25; S<sub>2</sub> = 0.60; and S<sub>3</sub> = 0.15.
a.Determine the expected value of d2 if the states of nature are S1 = 0.25; S2 = 0.60; and S3 = 0.15.
b.Determine the expected value for d3 if the states of nature are S1 = 0.25; S2 = 0.60; and S3 = 0.15.

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