Question

In: Statistics and Probability

A financial executive for Fidelity Investments lives in Boston but frequently must travel to New York....

A financial executive for Fidelity Investments lives in Boston but frequently must travel to

New York. She can go to New York by car, train, or plane. The cost for a plane ticket from

Boston to New York is $200, and it is estimated that the trip takes 30 minutes in good

weather and 45 minutes in bad weather. The cost for a train ticket is $100, and the trip

takes an hour in good weather and two hours in bad weather. The cost to drive her own car

from Boston to New York is $40, and this trip takes three hours in good weather and four in

bad weather. The executive places a value of $60 per hour on her time. The weather forecast

is for a 60% chance of bad weather tomorrow. What decision would you recommend?

(Hint: Set up a payoff table, and remember that you want to minimize costs.) What is the

expected value of perfect information?

Please show me how in an excel format or minitab on how to compute.

Solutions

Expert Solution

orchestra answered 1 year ago
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