Use graphical sensitivity analysis to determine the range of demand probabilities for which each of the decision alternatives has the largest expected value.

Question

I have two possible decisions, each with a favorable and unfavorable outcome. How do I do this?

Answer 1

What is the expected value of each outcome, that is the point of the assignment.

EV=Pr(favorable)*valuefavorable-Pr(unfavor)*velueunfavorable