Question 4.Consider two possible states of nature s₁ and 52 and three possible actions a 1,92 and a 3.a. Interpret the "ordered pair" (ai, sj) for i = {1,2,3} and j = {1,2}Suppose P(ai, sj) denotes the payoff arising from (ai,sj). Let P(a₁, S1)P(a2, s1) 140,000, P(a3, s1) = 80,000 and P(a1, S2) = 400,000, P(a2, $2) = 260,000,P(a3,S2) 90,000==b. Represent this in a tablec. Find the maximin solution- 130,000,=d. Find the minimax solutione. If you knew the probabilities of s₁ and 52 occuring how would your decision making strategychange ?

Since you have submitted a question with multiple subparts, as per guidelines we have answered the…

Answered: Consider two possible states of nature…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

See similar textbooks

Similar questions

QUESTION A The Miramar Company is going to introduce one of three new products: a widget, a hummer, or a nimnot. The market conditions (favorable, stable, or unfavorable) will determine the profit or loss the company realizes, as shown in the following payoff table: State of Nature     Favourable              Stable              Unfavourable Product                                   0.2                       0.7                        0.1 Widget                                          $ 120,000              $ 70,000             $ –30,000 Hummer                                 60,000                 40,000                  20,000 Nimnot                                   35,000                 30,000                  30,000 Compute the expected value for each decision and select the best one. Develop the opportunity loss table and compute the expected opportunity loss for each product.
QUESTION A The Miramar Company is going to introduce one of three new products: a widget, a hummer, or a nimnot. The market conditions (favorable, stable, or unfavorable) will determine the profit or loss the company realizes, as shown in the following payoff table: State of Nature     Favourable              Stable              Unfavourable Product                                   0.2                       0.7                        0.1 Widget                                          $ 120,000              $ 70,000             $ –30,000 Hummer                                 60,000                 40,000                  20,000 Nimnot                                   35,000                 30,000                  30,000 Compute the expected value for each decision and select the best one.
QUESTION A The Miramar Company is going to introduce one of three new products: a widget, a hummer, or a nimnot. The market conditions (favorable, stable, or unfavorable) will determine the profit or loss the company realizes, as shown in the following payoff table: State of Nature     Favourable              Stable              Unfavourable Product                                   0.2                       0.7                        0.1 Widget                                          $ 120,000              $ 70,000             $ –30,000 Hummer                                 60,000                 40,000                  20,000 Nimnot                                   35,000                 30,000                  30,000 Compute the expected value for each decision and select the best one. B.Develop the opportunity loss table and compute the expected opportunity loss for each product.
QUESTION Rockwater management added two financial measures. Project profitability provided focus on the project as the basic unit for planning and control, and sales backlog helped reduce uncertainty of performance. Rockwater wanted to recognize the distinction between its two types of customers: Tier I customers, oil companies that wanted a high value-added relationship, and Tier II customers, those that chose suppliers solely on the basis of price. A price index, incorporating the best available intelligence on competitive position, was included to ensure that Rockwater could still retain Tier II customers’ business when required by competitive conditions. The company’s strategy, however, was to emphasize value-based business. An independent organization conducted an annual survey to rank customers’ perceptions of Rockwater’s services compared to those of its competitors. In addition, Tier I customers were asked to supply monthly satisfaction and performance ratings. Rockwater…
QUESTION Rockwater management added two financial measures. Project profitability provided focus on the project as the basic unit for planning and control, and sales backlog helped reduce uncertainty of performance. Rockwater wanted to recognize the distinction between its two types of customers: Tier I customers, oil companies that wanted a high value-added relationship, and Tier II customers, those that chose suppliers solely on the basis of price. A price index, incorporating the best available intelligence on competitive position, was included to ensure that Rockwater could still retain Tier II customers’ business when required by competitive conditions. The company’s strategy, however, was to emphasize value-based business. An independent organization conducted an annual survey to rank customers’ perceptions of Rockwater’s services compared to those of its competitors. In addition, Tier I customers were asked to supply monthly satisfaction and performance ratings. Rockwater…
Question 5The management of CDC Construction Pioneers have decided to build 900 new apartments in the Kasoa area due to the influx of immigrant workers into the country. Two Architectural Companies have provided building plans and technical schematics for the project. Management are happy with the proposals of both Standard apartment and Deluxe apartment. After investigating the steps involved in construction, management determined that each apartment complex built will require some resources. Management analysed each of the bids and concluded that if the plans of Standard apartment are built, it requires 0.7 days in foundation works, 0.5 days in the masonry, 1 day in finishing, and 0.1 days in painting works. Deluxe apartment will require 1 day in foundation works, 0.83 days in the masonry, 0.67 days in finishing, and 0.25 days in the painting works. Management estimate that, 630 days for foundation works, 600 days for masonry, 708 days for finishing and 135 days for 11painting works…
QUESTION SIX (a) Suppose that a decision is faced with three decision alternatives and four states of nature. The following profit payoff table is constructed: Alternatives State of Nature 1S 2 S 3 S 4 S 1Α 2Α 3Α 18 15 13 12 14 16 15 10 19 8 11 15 Assuming that the decision maker has no knowledge about the probabilities of occurrence of the four states of nature, find the decisions to be recommended under each of the following criteria: iii. Minimax Reject criterion iv. Hurwicz criterion with 0.6 α =
QUESTION ONE(a) Mr. Sak is interested in developing and marketing a new drug. The cost of extensiveresearch to develop the drug would be 100,000. The manager of research programme saidthat there is 60% chance that the drug will be developed successfully. The market potentialis assessed as follows with present value of profit:Market conditions Probability Present value of profits.Large market potential 0.1 500,000Moderate market potential 0.6 220,000Low market potential 0.3 80,000The present value figures do not include the cost of research. While Mr. Sakala wasconsidering this proposal, another similar proposal came up which also required theinvestment of 100,000. The present value of profit for the second proposal was 120,000.The return on the investment in the second proposal is almost certain.i. Draw a decision tree for Mr. Sak indicating all choices and eventsii. What decision Mr. Sak should take regarding the investment of 100,000?iii. If Mr. Sak is a risk averter, should he…
Question ThreeThe management of a supermarket wants to adopt a new promotional policy ofgiving free gift to every customer who spends more than a certain amount pervisit at this supermarket. The expectation of the management is that after thispromotional policy is advertised, the expenditure for all customers at thissupermarket will be normally distributed with mean 400 £ and a variance of900£2.1) If the management wants to give free gifts to at most 10% of the customers,what should the amount be above which a customer would receive a free gift?2) In a sample of 100 customers, what are the number of customers whoseexpenditure is between 420 £ and 485 £?3) What is a probability of selecting a customer whose expenditure is differ thanthe population mean expenditure by at most 50 £?4) What is the probability that the expenditure of the first customer exceeds theexpenditure of the second customer by at least 20 £?5) In a sample of 250, find the count that corresponds to the interquartile…
QUESTION 2 One of the employees at eden co ltd,described working at the company as to work at eden,you've got to be interested in a lot of stuff. you've got to be prepared to catch people when they fall,because people are trying stuff all the time and you've got to be prepared for unexpected because part of the way we work is almost liberately created chaos by doing more stuff than we've possibly got time to do,which means more junior members have more chances to become leaders because the senior ones can't do it all. you've got to be optimistic and smiley and damed hardwork. one of the senior managers connected,we try not to be prescriptive about defining talent and we try to encourage people to take individual responsibility for their own career path here as much as we can help them to a career path (a) in your own opinion what factors have contributed to organization citizenship behaviour among staffs at eden? elaborate your answers (b)discuss the leadership style that has help to…
QUESTION THREE A company has prepared a design for a new product which it can either sale for K100 000 or develop into a marketable product at a cost of K150 000. The chances of success if the product is developed are 0.7. If this attempt fails the design can only be sold at K20 000. If the attempt succeeds the business has the choice of either selling the design and developed product for K180 000 or marketing the product. If the product is marketed then there is a 0.6 probability that the product will generate a cash inflow of K800 000 and a 0.4 probability that it will generate a cash outflow of (K100 000). Both figures exclude items previously mentioned. Draw a decision tree and advise management as to their best course of action. Assume that the cost of capital is 10 % and it took one year to develop the designs and a further year before the contribution was received, what would be the position now? Supposing there is a small change in the estimated probabilities of…
Question 1: According to the Columbia Accident Investigation Board, the root cause of the Columbia disaster was directly tied to Management’s unwillingness to adequately address the tradeoffs between the program’s conflicting goals of: Group of answer choices A) Cost, schedule, and safety B) Schedule, morale, and risk C) Safety, customer satisfaction, and schedule D) Cost, risk, and test flights

SEE MORE QUESTIONS

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Business in Action

Operations Management

ISBN:

9780135198100

Author:

BOVEE

Publisher:

PEARSON CO

Purchasing and Supply Chain Management

Operations Management

ISBN:

9781285869681

Author:

Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:

Cengage Learning

Production and Operations Analysis, Seventh Editi…

Operations Management

ISBN:

9781478623069

Author:

Steven Nahmias, Tava Lennon Olsen

Publisher:

Waveland Press, Inc.

SEE MORE TEXTBOOKS