BUS 220 Final: Decision Analysis Notes #3 (Sensitivity)

• School: Stony Brook University
• Department: Business Management
• Course: BUS 220
• Professor: Jadranka Skorin- Kapov

Document Summary

East west distributing is in the process of trying to determine where they should schedule next year"s production of a popular line of kitchen utensils that they distribute. Manufacturers in 3 different countries have submitted bids to east west. However, a pending trade bill in congress will greatly affect the cost to. East west due to proposed tariffs, favorable trading status, etc. After careful analysis, east west has determined the following cost breakdown for the 3 manufacturers (in ,000"s) based on whether or not the trade bill passes: Ans: using ev approach: ev(a) = 230, ev(b) = 224, ev(c) = 240; choose country b (lowest ev, as long as the probability of the bill passing is less than . 455, east west should choose.