(A) Draw a decision tree for this problem. (B) Using expected monetary value, which alternative should be chosen
Q: Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers…
A: In light of the data given in the inquiry, we can sum up the given choices as referenced in the…
Q: Downtown Health Clinic needs to order influenza vaccines for the next flu season. The Clinic charges…
A: a) The expected number of vaccines can be calculated as follows: Thus, the clinic should order 4300…
Q: A manufacturing plant has reached full capacity. The company must build a second plant—either small…
A: a. The rectangular nodes represent the decision nodes and the circular ones are chance nodes.
Q: Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers…
A: The expected return is indeed the profit or loss that an investor may expect from a given…
Q: our manager is quite concerned about the recent deterioration of a section of the roof on a building…
A:
Q: A manager is quite concerned about the recent deterioration of a section of the roof on a building…
A: Expected monetary value (EMV) is a risk management technique to help evaluate and analyze chances in…
Q: Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers…
A: The expected value of the random variable is defined as its long-term average level based on its…
Q: A real estate investor has the opportunity to purchase land currently zoned residential. If the…
A: a) Given, State of nature State of nature Rezoning approved Rezoning not approved…
Q: Ms. Rabiya Mateo and Ms. Sandra Lemonon, two real-estate investment partners, are assessing the…
A: The Tagiug City averse partner is more likely influenced by Risk Severity. Risk Severity refers to…
Q: Considering a used car market seller 10,000 2000 buyer 12,000 1000 A Good Car A lemon 1. Under…
A: The above question gives an explanation idea about the expectations of the prices between buyers and…
Q: Embassy Publishing Company received a six-chapter manuscript for a new college textbook. The editor…
A:
Q: ACME, Inc. firm was trying to decide which of the four projects it should submit a bid for, There…
A: The decision tree is shown below.
Q: Peter Martin will help his brother who wants to open a grocery store. Peter initially believes there…
A: Let, I1 be favorable research, I2 be unfavorable research, S1 be successful store and S2 be…
Q: White Valley Ski Resort is planning the ski lift operation for its new ski resort. Management is…
A: Revenue from one lift over 98 days season = 250*98*20 = $ 490,000 (at 100% capacity utilization)…
Q: A farmer must decide whether to take protective action to limit damage to his grapefruit crop in the…
A: The farmer decided to take a protective action to limit damage of his grapefruit crop . There are…
Q: 1. Following is the payoff table for the Pittsburgh Development Corporation (PDC) Condominium…
A: given
Q: Consider the following payoff table for three product decisions (A, B, and C) and three future…
A: Given data is
Q: 1. Rajah Company is going to introduce one of the three new products: A, B, and C or do nothing. As…
A: Find the Given details below: Given details: Product Market Condition, Payoff (RM) Favourable…
Q: For the following payoff table, what alternative should be chosen if you are following a Maximin…
A:
Q: The lease of Theme Park, Ic., is about to expire. Management must decide whether to renew the lease…
A: The amount that a person would be ready to pay to obtain perfect information is known as the…
Q: Embassy Publishing Company received a six-chapter manuscript for a new college textbook. The editor…
A: This is the answer for question A
Q: A manager is quite concerned about the recent deterioration of a section of the roof on a building…
A: The decision tree is a strong and well-known method for separating and foreseeing. A decision tree…
Q: A landowner is considering a community development project. Even though he realizes that the current…
A: A maximax approach is a procedure in game hypothesis where a player, confronting vulnerability,…
Q: The lease of Theme Park, Inc., is about to expire. Management must decide whether to renew the lease…
A: Given data is
Q: A manufacturing plant has reached full capacity. The company must build a second plant—eithersmall…
A: The expected payoff is a genuinely determined file that addresses the normal benefit/misfortune…
Q: A manager is quite concerned about the recent deterioration of a section of the roof on a building…
A: A decision tree is a graphical illustration of all the desirable answers to a decision based on…
Q: A farmer must decide whether to take protective action to limit damage to his grapefruit crop in the…
A: The farmer must decide whether to take protective action to limit damage to his grapefruit crop…
Q: A group of medical professionals is considering the construction of a private clinic. If the medical…
A: A decision tree analysis is a method which is used by companies to make decisions based on the…
Q: Cliff Branch’s firm was trying to decide if it should submit a proposal for Project 1, Project 2,…
A:
Q: Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers…
A: Given data: Alternative Scenario Probability Possibleprofit/loss(Impact) Build New Plant ATR…
Q: Suppose that the management of Theme Park, Inc., has decided that there is a.35 probability that the…
A:
Q: Cheryl Druehl Retailers, Inc., must decide whether to build a small or a large facility at a new…
A: Expected worth is a proportion of what you ought to hope to get per game over the long haul. The…
Q: Suppose we are considering the question of how much capacity to build in the face of uncertain…
A: The probability of various demand levels is as follows: Demand – x units Probability of x 1 0…
Q: Construct a decision tree to help the farmer make his decision. What should he do? Explain your…
A: A decision tree is the analysis of the options that are to be considered or chosen among to take the…
Q: A manager is quite concerned about the recent deterioration of a section of the roof on a building…
A: Given that: Condition I: Probability of occurrence is 0.5 Condition II: Probability of occurrence is…
Q: 10. An investor must decide between two alternative investments-stocks and bonds. The return for…
A: A payoff table refers to a table that can be used to represent and analyze a scenario that has a…
Q: Cheryl Druehl Retailers, Inc., must decide whether to build a small or a large facility at a new…
A: Find the Decision Tree below:
Q: Following is the payoff table for the Pittsburgh Development Corporation (PDC) Condominium Project.…
A: The expected value of decision 3 is
Q: Johnson Chemicals is considering two options for its supplier portfolio. Option 1 uses two local…
A: Probability is the calculation of how likely is the possibility of occurrence of any event or…
Q: Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers…
A: Probability = 0.40 Expected profit without suit = $40000 Expected profit with suit =$ 20000…
Q: hat should Cheryl do to maximize her expected payoff? Part 3 Choose the correct decision tree…
A: A decision tree is a diagrammatic presentation of the alternatives available for a certain project…
Q: Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers…
A:
Q: A situation in which a decision maker must choose bety possible outcome when the probability of each…
A: When there are the chances of more than one outcome as a result then the decision-maker chooses the…
Q: •A mediçal doctor doing a bypass surgery to his patient is involved in Php 2 million malpractice…
A: The total suit amount is 2 million out of which 1.75 million is the redressal amount and 0.25…
Q: A new minor league baseball team is coming to town and the owners have decided to build a new…
A: Expected value is a proportion of what you ought to hope to get per game over the long haul. The…
Q: The ARA Railroad owns a piece of land along with one of its right-of-ways. The land originally cost…
A: The cost of the next best alternative available to ARA Railroad; that is, selling the land to an…
A manager is quite concerned about the recent deterioration of a section of the roof on a building that houses her firm’s computer operations. According to her assistant there are three options which merit consideration: A, B, and C. Moreover, there are three possible future conditions that must be included in the analysis: I, which has a probability of occurrence of .5; II, which has a probability of .3; and III, which has a probability of .2.
If condition I materializes, A will cost $1500, B will cost $2000, and C will cost $1600. If condition II materializes, the costs will be $1500 for A, $1800 for B, and $1900 for C. If condition III materializes, the costs will be $1000 for A, $1600 for B, and $1900 for C.
(A) Draw a decision tree for this problem.
(B) Using expected monetary value, which alternative should be chosen
Step by step
Solved in 2 steps with 1 images
- A manager is quite concerned about the recent deterioration of a section of the roof on a building that houses her firm’s computer operations. According to her assistant there are three options which merit consideration: I, II, and III. Moreover, there are three possible future conditions that must be included in the analysis: A, which has a probability of occurrence of .25; B, which has a probability of .6; and C, which has a probability of .15. If condition A materializes, I will cost $12000, II will cost $20000, and III will cost $16000. If condition B materializes, the costs will be $15000 for I, $18000 for II, and $14000 for III. If condition C materializes, the costs will be $10000 for I, $15000 for I, and $19000 for III. (A) Draw a decision tree for this problem. (B) Using expected monetary value, which alternative should be chosenA manager is quite concerned about the recent deterioration of a section of the roof on a building that houses her firm's computer operations. According to her assistant there are three options which merit consideration: I, II, and III. Moreover, there are three possible future conditions that must be included in the analysis: A, which has a probability of occurrence of .3; B, which has a probability of .5; and C, which has a probability of .2.If condition A materializes, I will cost $12,000, II will cost $20,000, and III will cost $16,000. If condition B materializes, the costs will be $15,000 for I, $18,000 for II, and $14,000 for III. If condition C materializes, the costs will be $10,000 for I, $15,000 for II, and $19,000 for III.(A) Draw a decision tree for this problem.(B) Using expected monetary value, which alternative should be chosen?A manager is quite concerned about the recent deterioration of a section of the roof on a building that houses her firm's computer operations. According to her assistant, there are three options which merit consideration: A, B, and C. Moreover, there are three possible future conditions that must be included in the analysis: I, which has a probability of occurrence of .5; II, which has a probability of .3; and III, which has a probability of .2.If condition I materializes, A will cost USD 12,000, B will cost USD 20,000, and C will cost USD 16,000. If condition II materializes, the costs will be USD 15,000 for A, USD 18,000 for B, and USD 14,000 for C. If condition III materializes, the costs will be USD 10,000 for A, USD 15,000 for B, and USD 19,000 for C._____ alternative will yield the most profit_____ is the profit for the said alternative
- A firm must decide whether to construct a small, medium, or large stamping plant. A consultant’sreport indicates a .20 probability that demand will be low and an .80 probability that demand willbe high.If the firm builds a small facility and demand turns out to be low, the net present value will be$42 million. If demand turns out to be high, the firm can either subcontract and realize the net present value of $42 million or expand greatly for a net present value of $48 million.The firm could build a medium-size facility as a hedge: If demand turns out to be low, its netpresent value is estimated at $22 million; if demand turns out to be high, the firm could do nothingand realize a net present value of $46 million, or it could expand and realize a net present value of$50 million.If the firm builds a large facility and demand is low, the net present value will be – $20 million,whereas high demand will result in a net present value of $72 million.a. Analyze this problem using a decision…Your manager is quite concerned about the recent deterioration of a section of the roof on a building that houses your firm's computer operations. According to your assistant there are three options which merit consideration: A, B, and C. Moreover, there are three possible future conditions that must be included in the analysis: I, which has a probability of occurrence of .5; II, which has a probability of .3; and III, which has a probability of .2. If condition I materializes, A will cost $12,000, B will cost $20,000, and C will cost $16,000. If condition II materializes, the costs will be $15,000 for A, $18,000 for B, and $14,000 for C. If condition III materializes, the costs will be $10,000 for A, $15,000 for B, and $19,000 for C. (A) Draw a decision tree for this problem (B) Using expected monetary value, which alternative should be chosen? Explain your Answer.Option 2: Raise prices by 50%. If this occurs, there is a 75% chance that an Entrepreneur will set up in competition this year. The board’s estimate of its annual profit in this situation would be as follows: 2A: With new competitor 2B: Without new competitor Probability Profit (Sh.) Probability Profit (Sh.) 0.25 150,000 0.5 200,000 0.5 120,000 0.3 150,000 0.25 80,000 0.2 100,000 Option 3: Expand the car park quickly at a cost of Sh. 50,000 keeping prices theSame. The profits are then estimated to be like 2B above, except that the probabilities would be 0.6, 0.3 and 0.1 respectively. Required: Draw a decision tree for the above problem, including all the relevant data. Using expected values analyze the decision tree and recommend the best option to the owners of the car park.
- Howard Weiss, Inc., is considering building a sensitive new radiation scanning device. His managers believe that ther is a probability of 0.40 that the ATR Co. does not follow with a competitive product. Weiss's expected profit is $50,000; If weiss adds an assembley line and ATR follows suit, Weiss still expects $15,000 profit. If Weiss adds a new plant addition adn ATR does not produce a competitive product, weiss expects a profit of $600,000; if ATR does compete for this market, weiss expects a loss of $100,000 a) Expected value for the Add Assembly Line option=$____Jeffrey Mogul is a Hollywood film producer, and he is currently evaluating a script by a new screenwriter and director, Betty Jo Thurston. Jeffrey knows that the probability of a film by a new director being a success is about .10 and that the probability it will flop is .90. The studio accounting department estimates that if this film is a hit, it will make $25 million in profit, whereas if it is a box office failure, it will lose $8 million. Jeffrey would like to hire noted film critic Dick Roper to read the script and assess its chances of success. Roper is generally able to correctly predict a successful film 70% of the time and correctly predict an unsuccessful film 80% of the time. Roper wants a fee of $1 million. Determine whether Roper should be hired, the strategy Mogul should follow if Roper is hired, and the expected value.A real estate investor has the opportunity to purchase land currently zoned residential. If the county board approves a request to rezone the property as commercial within the next year, the investor will be able to lease the land to a large discount firm that wants to open a new store on the property. However, if the zoning change is not approved, the investor will have to sell the property at a loss. Profits (in thousands of dollars) are shown in the following payoff table: a. If the probability that the rezoning will be approved is 0.5, what decision is recommended? What is the expected profit? b. The investor can purchase an option to buy the land. Under the option, the investor maintains the rights to purchase the land anytime during the next three months while learning more about possible resistance to the rezoning proposal from area residents. Probabilities are as follows: Let H = High resistance to rezoning L = Low resistance to rezoning P(H) = 0.55 P(S1 | H) =…
- A new minor league baseball team is coming to town and the owners have decided to build a new stadium, either small or large. The success of the team with regard to ticket sales will be either high or low with probabilities of 0.75 and 0.25, respectively. If demand for tickets is high, the large stadium would provide a payoff of approximately $20 million. If ticket sales are low, the loss on the large stadium would be $5 million. If a small stadium is constructed, and ticket sales are low, the payoff is $500,000 after deducting the cost of construction. If ticket sales are high, the team can choose to build an upper deck, or to maintain the existing facility. Expanding the stadium in this scenario has a payoff of $10 million, whereas maintaining the same number of seats has a payoff of only $3 million. a. Draw a decision tree for this problem. b. What should management do to achieve the highest expected payoff?1. Following is the payoff table for the Pittsburgh Development Corporation (PDC) Condominium Project. Amounts are in millions of dollars.State of NatureDecision Alternative Strong Demand S1 Weak Demand S2Small complex, d1 8 7Medium complex, d2 15 3Large complex, d3 20 -82. Suppose PDC is optimistic about the potential for the luxury high-rise condominium complex and that this optimism leads to an initial subjective probability assessment of 0.83 that demand will be strong (S1) and a corresponding probability of 0.17 that demand will be weak (S2). Assume the decision alternative to build the large condominium complex was found to be optimal using the expected value approach. Also, a sensitivity analysis was conducted for the payoffs associated with this decision alternative. It was found that the large complex remained optimal as long as the payoff for the strong demand was greater than or equal to $17.25 million and as long as the payoff for the weak demand was greater than or equal…The Hard to Beat Bakery is deciding whether to buy or repair an existing oven thatthey have been using for over 8 years. If they elect to repair, it will cost the entity$950,000 and either of two outcomes is likely: 1. A 20% probability it will perform okay and generate revenues of$10,000,000, or 2. An 80% chance that it will be partially restored and generate revenue of$2,000,000. If on the other hand however, they purchase a new oven, they can either buy animported oven for $3,500,000 or they can buy a locally made one for $2,200,000.If the elect to purchase the imported oven, production will earn them revenues of$15,550,000, but if they buy the locally made oven, there is a 70% likelihood thatit perform as expected and generate revenues of $12,000,000; and a 30% chancethat it will not and generate revenues of $6,000,000. Required: 1. Draw a decision tree of this problem and determine the expected value.2. Advise the management of the Bakery on how to proceed.3. Briefly discuss the…