It seems obvious that if you can purchase information before making an ultimate decision, this information should generally be worth something, but explain exactly why (and when) it is sometimes worth nothing.
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It seems obvious that if you can purchase information before making an ultimate decision, this information should generally be worth something, but explain exactly why (and when) it is sometimes worth nothing.
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- Using the following table, perform ALL FIVE of the techniques for Decision Making under Uncertainty: Maximax, Maximin, Hurwicz Realism (α = 0.7), LaPlace and Minimax Regret. Use the .50 for the probability of a Good Economy and .50 for the probability of a Poor Economy. You must show your work for obtaining the points. STATE OF NATURE DECISION ALTERNATIVE GOOD ECONOMY POOR ECONOMY Sotck market 80,000 -20,000 Bonds 30,000 20,000 CDs 23,000 23,000You often hear about the trade-off between risk and reward. Is this trade-off part of decision making under uncertainty when the decision maker uses theEMV criterion? For example, how does this work in investment decisions?You are entrusted with deciding whether to make or buy software. The make decision has a setup cost of $15,000 and a monthly maintenance cost of $1,200. A vendor will sell the software for an initial cost of $11,400 and a monthly cost of $3,000. For how many months must the company use this software to support a make decision?
- Using the following table, perform ALL FIVE of the techniques for Decision Making under Uncertainty: Maximax, Maximin, Hurwicz Realism (α = 0.7), LaPlace and Minimax Regret. Use the .50 for the probability of a Good Economy and .50 for the probability of a Poor Economy. You must show your work. STATE OF NATURE DECISION ALTERNATIVE GOOD ECONOMY POOR ECONOMY Sotck market 80,000 -20,000 Bonds 30,000 20,000 CDs 23,000 23,000Please pick a specialized book that interests you and point to 4 examples that contain numerical data that can be used to make decisions under uncertainty.(a) Please list each item in each example.(b) Please identify (1) decision maker; (2) alternatives; (3) uncertainties in each example.2 true or false If the decision doesn’t involve risk and uncertainty, utility is the numerical score to measure the attractiveness of a course of action.
- You are the owner of four Taco Bell restaurant locations. You have a business loan with Citizens Bank taken out 60 days ago that is due in 90 days. The amount of the loan is $70,000, and the rate is 9.5% using ordinary interest. You currently have some excess cash: $25,000. Due to situations beyond your control, you, as the owner, must make an immediate business decision now to pursue only one of these two choices:1) sending all of the $25,000 to Citizens Bank as a partial payment on your loan, or2) using the $25,000 to purchase serving supplies such as food containers, cups, and plastic dinnerware for your inventory. This is the last day to take advantage of the opportunity to save some money due to a special discount price that is "10% off" the normal cost of $25,000 for these items. Consider these calculations: (a) How much interest (in $) will you save on this loan if you make the partial payment and don't purchase the additional serving supplies? (Round your answer to two…What are various types of information for decision making does simulation typically provide?Using Excel Spreadsheet and formulas for this problem (make sure cell references are unique to your table). Provide all techniques practiced previously: five (5) techniques for Decisions Making under Uncertainty, EMV, EOL, and EVPI. Use α = 0.7 for the Hurwicz. Use the .50 for the probability of a Good Economy and .50 for the probability of a Poor Economy. Show the work on an Excel file. STATE OF NATURE DECISION ALTERNATIVE GOOD ECONOMY POOR ECONOMY Sotck market 80,000 -20,000 Bonds 30,000 20,000 CDs 23,000 23,000
- Which one of the following options is not considered as a key factor for making good decisions when there is a conflict of interest? a. Negligence b. Objectivity c. Impartiality d. FairnessYou are planning to rent a car for a one-week vacation. You have the option of buying an insurance that costs $80 dollars for a week. If you do not purchase insurance, you would be personally liable for any damages. You anticipate that a minor collision will cost $2,000, whereas a major accident might cost $16,000 in repairs. Develop a payoff table for this situation. What decision should you make using each strategy? Aggressive (Optimistic) Conservative (Pessimistic) Opportunity Loss You have recently read in a magazine that that the probability of a major accident is 0.05% and that the probability of a minor collision is 0.18%. Construct a decision tree and identify the best expected value decision.If there can be only one answer, what would it be?