Just need work shown. :) 4. A plant manager considers the operational cost per hour of five machine alternatives.The cost per hour is sensitive to three potential weather conditions: cold, mild, andwarm. The following table represents the operations cost per hour for each alternative-state of nature combination:States of NatureWeather related cost per hourAlternatives Cold cost/day Mild cost/day Warm cost/day$50$45$40Machine 1Machine 2Machine 3Machine 4Machine 5$40$42|$35$25$45$47$54$48$45$60$45$40Using the optimistic criterion, which alternative is best?Using the pessimistic criterion, which alternative is best? Using the equally likely criterion, which alternative is best?Assume that for a randomly selected day, there is a 30% probability of cold weather,50% probability of mild weather, and 20% probability of warm weather. What alternativeis best using EMV?Assume that for a randomly selected day, there is a 30% probability of cold weather,50% probability of mild weather, and 20% probability of warm weather. What is theEVPI?

Since you have asked multiple questions, we will solve the first question for you. If you want any…

Answered: Using the optimistic criterion, which…

Business

Operations Management

Using the optimistic criterion, which alternative is best?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter4: Linear Programming Models

Section4.8: Data Envelopment Analysis (dea)

Problem 42P

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Concept explainers

Breakeven Analysis

Break Even Analysis is a term used in business, cost accounting and economics. It refers to a point where the total cost incurred becomes equal to the total revenue earned. Break Even Analysis determines the number of units to be sold to earn the revenue required to cover the total costs. Total cost is a sum total of fixed and variable costs.

Process analysis

The term process analysis can be defined as breakdown of production process into different phases that converts inputs into output. A series of routine activities are incorporated using organizational resources with a view to achieve operational excellence.

Question

Just need work shown. :)

4. A plant manager considers the operational cost per hour of five machine alternatives.
The cost per hour is sensitive to three potential weather conditions: cold, mild, and
warm. The following table represents the operations cost per hour for each alternative-
state of nature combination:
States of Nature
Weather related cost per hour
Alternatives Cold cost/day Mild cost/day Warm cost/day
$50
$45
$40
Machine 1
Machine 2
Machine 3
Machine 4
Machine 5
$40
$42|
$35
$25
$45
$47
$54
$48
$45
$60
$45
$40
Using the optimistic criterion, which alternative is best?
Using the pessimistic criterion, which alternative is best?

Using the equally likely criterion, which alternative is best?
Assume that for a randomly selected day, there is a 30% probability of cold weather,
50% probability of mild weather, and 20% probability of warm weather. What alternative
is best using EMV?
Assume that for a randomly selected day, there is a 30% probability of cold weather,
50% probability of mild weather, and 20% probability of warm weather. What is the
EVPI?

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