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14-05-2023
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.A paint company has three sources for buying bright red pigment for their paints: Vietnam, Taiwan, or Thailand. Unfortunately, the pigment is made from a bush whose annual growth is heavily dependent upon the amount of rainfall during the growing season. The tables below show probabilities and prices for wet, dry and normal growing seasons:

Probabilities

Wet Dry Normal

Vietnam .5 .2 .3

Taiwan .6 .3 .1

Thailand .4 .4 .2

Price/Pound ($)

Wet Dry Normal

Vietnam .95 1.10 1.00

Taiwan .85 1.20 .98

Thailand .90 1.15 1.05

What is the expected value (price) associated with the selected firm?

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