Tremblay
​Products, Inc., of Quebec​ City, has the option of​ (a) proceeding immediately with production of a new​ top-of-the-line stereo TV that has just completed prototype testing or​ (b) having the value analysis
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team complete a study. If Ed​ Lusk, VP for​ operations, proceeds with the existing prototype​ (option a), the firm can expect sales to be
85,000
units at
​$530
​each, with a probability of
0.57
and a
0.43
probability of
80,000
at
​$530.
​If, however, he uses the value analysis team​ (option b), the firm expects sales of
80,000
units at
​$750​,
with a probability of
0.61
and a
0.39
probability of
60,000
units at
​$750.
Value​ analysis, at a cost of
​$95,000​,
is only used in option b. Which option has the highest expected monetary value​ (EMV)?
Part 2
The EMV for option a is
​$enter your response here
and the EMV for option b is
​$enter your response here.
​Therefore, option
▼
a
b
has the highest expected monetary value.
​(Enter
your responses as
integers​.