The local operations manager for the Internal Revenue Service must decide whether to hire one, two, or three temporary tax examiners for the upcoming tax season. She estimates that net revenues (000...


The local operations manager for the Internal Revenue Service must decide whether to hire<br>one, two, or three temporary tax examiners for the upcoming tax season. She estimates that<br>net revenues (000 dollars) will vary with how well taxpayers comply with the new tax code just<br>passed by Congress, as follows. Show your work how you got your answer.<br>Number of Examiners Compliance<br>Low<br>Normal<br>High<br>One<br>50<br>50<br>50<br>Two<br>100<br>60<br>20<br>Three<br>150<br>70<br>-10<br>A) If she uses the Maximin criterion, how many new examiners will she decide to hire?<br>B) If she uses the minimax regret criterion, how many examiners will she decide to hire?<br>C) If she feels the chances of low, medium, and high compliances are 20%, 30% and 50%<br>respectively, what are the expected net revenues for the number of assistants she will decide<br>to hire?<br>D) If she feels the chances of low, medium and high compliance are 20%, 30% and 50%<br>respectively, what is her expected value of perfect information (EVPI)?<br>

Extracted text: The local operations manager for the Internal Revenue Service must decide whether to hire one, two, or three temporary tax examiners for the upcoming tax season. She estimates that net revenues (000 dollars) will vary with how well taxpayers comply with the new tax code just passed by Congress, as follows. Show your work how you got your answer. Number of Examiners Compliance Low Normal High One 50 50 50 Two 100 60 20 Three 150 70 -10 A) If she uses the Maximin criterion, how many new examiners will she decide to hire? B) If she uses the minimax regret criterion, how many examiners will she decide to hire? C) If she feels the chances of low, medium, and high compliances are 20%, 30% and 50% respectively, what are the expected net revenues for the number of assistants she will decide to hire? D) If she feels the chances of low, medium and high compliance are 20%, 30% and 50% respectively, what is her expected value of perfect information (EVPI)?

Jun 11, 2022
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