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Practical Management Science

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 21P

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Question

A5

Q1: A male and a female manager of a company try to de-
cide which product will be developed. If product A is de-
veloped, it will yield $5 million net return with 0.2 proba-
bility, $8 million net return with 0.5 probability, and $9
million net return with 0.3 probability. If product B is de-
veloped, it will yield $8 million net return for sure.
The utility function for the male manager is: 4(x)=x
The utility function for the female
Q1.1: Tells the risk attitudes of the male and female man-
manager
is: 14() 022
ager respectively?
Q1.2: According to the expected utility criterion, what is
the choice for the male and the female manager respec-
tively?

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