In: Statistics and Probability
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 .