Q1) Polo Development Firm is building a shopping centre. It has informed renters that their rental spaces will be prepared for occupancy in 19 months. If expected time until shopping centre is completed is evaluated to be 14 months, with standard deviation of 4 months, find out the probability that renters will not be able to reside in in 19 months?
Q2) Quality control manager for ENTA Inc. should decide whether to accept (a1), further analyze(a2), or reject (a3) lot of incoming material. Suppose following payoff table is available. Historical data points out that there is a 20% chance that lot is poor quality (s1), a 50% chance that lot is fair quality (s2), and 30% chance that the lot is good quality (s3)
|
|
S1
|
s2
|
s3
|
|
A1
|
20
|
30
|
90
|
|
A2
|
60
|
70
|
10
|
|
|
80
|
50
|
40
|
a) Compute expected value for each of three actions and find out if manager must accept, further analyze, or reject the lot?
b) Determine expected value of perfect information (EVPI)?