Hello. Could you help out with the problem below. . A large steel manufacturing company has three options with regards to production: (i) produce commercially (ii) build pilot plant (iii) stop producing steel. The management has estimated that their pilot plant, if built, has 0.8 chance of high yield and 0.2 chance of low yield. If the pilot plant does show a high yield, management assigns a probability of 0.75 that the commercial plant will also have a high yield. If the pilot plant shows a low yield there is only a 0.1 chance that the commercial plant will show a high yield. Finally, management’s best assessment of the yield on a commercial -size plant without building a pilot plant first has a 0.6 chance of high yield. A pilot plant will cost N300,000. The profits earned under high and low yield conditions are N12,000,000 and N1,200,000 respectively. Find the optimum decision for the company.
@3:37: Hi...Your choice is wrong because of a mathematical problem at 3:37. EMV node 3 should be 21,350Usd and not 40,250usd. Thus making the choice of Manufacturing a very bad decision. Please revise and repost. For the record, i learnt from you. So thanks anyway. Blessings! 2021 here
Thx great video. How do you come up with the probabilities for success?
ms. Charlene , your voice is soothing but not domineering, helped me concentrate on topic not get a hard on. You're wonderful
great video. thanks for sharing the knowledge!!
Hello. Could you help out with the problem below.
. A large steel manufacturing company has three options with regards to production: (i) produce commercially (ii) build pilot plant (iii) stop producing steel. The management has estimated that their pilot plant, if built, has 0.8 chance of high yield and 0.2 chance of low yield. If the pilot plant does show a high yield, management assigns a probability of 0.75 that the commercial plant will also have a high yield. If the pilot plant shows a low yield there is only a 0.1 chance that the commercial plant will show a high yield. Finally, management’s best assessment of the yield on a commercial -size plant without building a pilot plant first has a 0.6 chance of high yield. A pilot plant will cost N300,000. The profits earned under high and low yield conditions are N12,000,000 and N1,200,000 respectively. Find the optimum decision for the company.
Nice one but could solve a complex problem. Thanks
too much help full vedio.. thanks a lot
Thanks for sharing the knowlwdge
THE BEST THANK U
What is your mic?
Oke thanks your information learning
Thank you
@3:37: Hi...Your choice is wrong because of a mathematical problem at 3:37. EMV node 3 should be 21,350Usd and not 40,250usd. Thus making the choice of Manufacturing a very bad decision. Please revise and repost. For the record, i learnt from you. So thanks anyway. Blessings! 2021 here
hi waffa