The quality control manager for Porter Inc. must decide whether to accept, further analyze ...

      The quality control manager for Porter Inc. must decide whether   to accept, further analyze or reject a lot of incoming material used to make   disposable coffee cups. Historical data indicates that there is 30% chance   that the lot is poor quality, 50 % chance that the lot is fair quality and   20% chance that the lot is good quality. The payoff table below indicates the   profits available depending on the decision made and the quality of the lot.    Low Quality Fair Quality   Accept 20 30   Further Analyze 60 70   Reject 80 50   a) Assuming   profit is the only objective, what should the quality control manger do with   the lot of incoming material?   b) What is   the maximum amount that the manager would be willing to pay for perfect   information?