Use the following data to answer questions 77-87.
-Refer to the data on Expected Demand for Acme Widgets.For the various demand scenarios and their associated probabilities,the option to outsource has an expected value of ______.
A)$21.58 million
B)$39.56 million
C)$36.20 million
D)$51.55 million

Question

Use the following data to answer questions 77-87.  
-Refer to the data on Expected Demand for Acme Widgets.For the various demand scenarios and their associated probabilities,the option to outsource has an expected value of ______.
A)$21.58 million 
B)$39.56 million 
C)$36.20 million 
D)$51.55 million

Quizplus · Accepted Answer

The expected value of an option in decision-making under uncertainty is calculated by multiplying each possible outcome by its probability and then summing these products. Without the specific data on the demand scenarios, probabilities, and outcomes for the option to outsource, we cannot perform the exact calculation here. However, the correct answer is based on applying this principle to the provided data on expected demand for Acme Widgets and their associated probabilities.

Use the Following Data to Answer Questions 77-87