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The operations manager for a local bus company wants to decide whether he should purchase a...

The operations manager for a local bus company wants to decide whether he should purchase a small or large new bus for his company. He estimates that the annual profits will vary depending upon whether passenger demand is low or high. The manager believes that there is about a 7 in 10 chance that demand will be high. Which of the following statements is true?

Four profit figures are needed to make this decision
The probability that demand will be low is less than 25%
The manager must choose the level of passenger demand
The states of nature need to be 100% accurate
Only the chance of high demand is needed to make this decision
math   Statistics-And-Probability   
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Answer #1

Answer :

given data :-

The operations manager for a local bus company wants to decide whether he should purchase a small or large new bus for his company. He estimates that the annual profits will vary depending upon whether passenger demand is low or high. The manager believes that there is about a 7 in 10 chance that demand will be high

The correct answer for the given statement is,

option (A)

  • Four profit figures are needed to make this decision

Clarification :-

The choice can be come to if benefit figures are given.

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