Based on the following payoff table answer the following the bayes decision rule strategy is

A small entrepreneurial company is trying to decide between developing two different products that they believe they can sell to two potential companies, one large and one small. If they develop Product A, they have a 50% chance of selling it to the large company with annual purchases of about 20,000 units. If the large company won't purchase it, then they think they have an 80% chance of placing it with a smaller company, with sales of 15,000 units. On the other hand if they develop Product B, they feel they have a 40% chance of selling it to the large company, resulting in annual sales of about 17,000 units. If the large company doesn't buy it, they have a 50% chance of selling it to the small company with sales of 20,000 units.

What is the probability that Product A will being purchased by the smaller company?
0.8
0.5
0.4
0.2

A small entrepreneurial company is trying to decide between developing two different products that they believe they can sell to two potential companies, one large and one small. If they develop Product A, they have a 50% chance of selling it to the large company with annual purchases of about 20,000 units. If the large company won't purchase it, then they think they have an 80% chance of placing it with a smaller company, with sales of 15,000 units. On the other hand if they develop Product B, they feel they have a 40% chance of selling it to the large company, resulting in annual sales of about 17,000 units. If the large company doesn't buy it, they have a 50% chance of selling it to the small company with sales of 20,000 units.

What is the probability that Product B will being purchased by the smaller company?
0.8
0.5
0.4
0.3

A small entrepreneurial company is trying to decide between developing two different products that they believe they can sell to two potential companies, one large and one small. If they develop Product A, they have a 50% chance of selling it to the large company with annual purchases of about 20,000 units. If the large company won't purchase it, then they think they have an 80% chance of placing it with a smaller company, with sales of 15,000 units. On the other hand if they develop Product B, they feel they have a 40% chance of selling it to the large company, resulting in annual sales of about 17,000 units. If the large company doesn't buy it, they have a 50% chance of selling it to the small company with sales of 20,000 units.

How many units of Product A can they expect to sell?
20,000
17,000
16,000
15,000

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Video Transcript

We want to find the expected value of perfect information and calculate it minus the expected value without perfect information, because we want to pay off table. We will find our expected monetary value or expected value when we begin. If the value is 10 and there is a chance of.3 we can do 10 times. It will take 20 times the probability and 40 times the probability to get the expected monetary value for small, which is 24 point. 40 times the probability, 35 times the probability, and 20 times the probability will get you 40.5, 36.5, and a 32 point. This is your expected monetary value and it is a weighted average of payoffs for each position. It's a weighted average for small, a weighted average for medium, a weighted average for large, and a weighted average for extra large The expected value without perfect information is going to be the highest value here now we want to calculate it with perfect information. The biggest pay out is going to come up if the yes is indeed going to happen, so we'd like to see the 60 point, because it's the highest times.3. we will do 45 times. When we do 60 times.3 plus 45 times.7, we get a value of 49.5, which is your expected value with perfect information, and then we're going to subtract our expected value without perfect information, and you're going to get an answer of 9 It's the price one's willing to pay in order to gain access to that perfect information and our answer choices where they were actually when you check a circle, so it's your best expected pay off without additional information. Your answer choices were 4.5940,.549.5 or 60 point, and you would get an answer of 9.