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In: Statistics and Probability

A plant manager considers that operational cost per hour of five alternative machines. The cost per...

A plant manager considers that operational cost per hour of five alternative machines. The cost per hour is sensitive to three potential weather conditions: cold, mild, and warm. The following table represents the operational cost per hour for each alternative-state of nature combination.

Alternatives Cold Mild Warm
Machine 1

50

 40 45
Machine 2 45 42 47
Machine 3 40 35 54
Machine 4 60 25 48
Machine 5 45 40 45
Probability 30% 50% 20%

The EVPI is .

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