Question: Refer to the previous question. Morley Properties can hire a consultant to predict the most likely level of demand for this project. This consultant has done many similar studies and has provided Morley Properties with the following joint probability table summarizing the accuracy of the results:

The sum of the entries on the main diagonal of this table indicates that the consultant’s forecast is correct about 82.25% of the time, overall.

1. Construct the conditional probability table showing the probabilities of the various actual demands given each of the forecasted demands.
2. What is the EMV of the optimal decision without the consultant’s assistance?
3. Construct a decision tree that Morley Properties would use to analyze the decision problem if the consultant is hired at a cost of $0.
4. What is the EMV of the optimal decision with the consultant’s free assistance?
5. What is the maximum price that Morley Properties should be willing to pay to the consultant?

Price: $2.99

Solution: The downloadable solution consists of 4 pages
Deliverable: Word Document