In: Statistics and Probability
The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent on the demand for the product. The following payoff table shows the projected profit (in thousands of dollars):
The state-of-nature probabilities are P(s1) = 0.50, P(s2) = 0.40, and P(s3) = 0.10
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