To construct : A decision tree. Introduction: Decision tree is one of the methods used in decision-making process. It would graphically represent the available alternatives and states of nature. It would also mention the payoffs and probabilities of the alternatives. It helps to choose the best alternative that would give the best result among the alternatives.

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Answer 1

Question

Chapter 5.S, Problem 12P

a)

Summary Introduction

To construct: A decision tree.

Introduction:

Decision tree is one of the methods used in decision-making process. It would graphically represent the available alternatives and states of nature. It would also mention the payoffs and probabilities of the alternatives. It helps to choose the best alternative that would give the best result among the alternatives.

b)

Summary Introduction

Approach: 1

To identify: Decision making under uncertainty.

Maximax decision:

Maximax is the decision making method which come decision making under uncertainty. This method finds an alternative that maximizes the maximum outcome of each alternative or we can say that calculating the maximum outcome within every alternative.

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A logistics provider plans to have a new warehouse built to handle increasing demands for its services. Although the company is unsure of how much demand there will be, it must decide now on the size (large or small) of the warehouse. Preliminary estimates are that if a small warehouse is built and demand is low, the monthly income will be $700,000. If demand is high, it will have to either expand the facility or lease additional space. Leasing will result in a monthly income of $100,000 while expanding will result in a monthly income of $500,000. If a large warehouse is built and demand is low, monthly income will only be $40,000, while if demand is high, monthly income will be $2 million.a. Construct a tree diagram for this decision.b. Using your tree diagram, identify the choice that would be made using each of the four approaches for decision making under uncertainty

The Ace Steel Mill estimates the demand for steel in millions of tons per year as follows:Millions of Tons Probability10 .1012 .2514 .3016 .2018 .15a. If capacity is set at 18 million tons, how much of a capacity cushion is there?b. What is the probability of idle capacity, and what is the average utilization of the plant at 18 million tons of capacity?c. If it costs $8 million per million tons of lost business and $80 million to build a million tons of capacity, how much capacity should be built to minimize total costs?

Comfort Plus Inc. (CPI) manufactures a standard dining chair used in restaurants. The demand forecasts for quarter 1 (January–March) and quarter 2 (April–June) are 3700 chairs and 4200 chairs, respectively. CPI has a policy of satisfying all demand in the quarter in which it occurs. The chair contains an upholstered seat that can be produced by CPI or purchased from DAP, a subcontractor. DAP currently charges $12.50 per seat, but has announced a new price of $13.75, effective April 1. CPI can produce the seat at a cost of $10.25. CPI can produce up to 3800 seats per quarter. Seats that are produced or purchased in quarter 1 and used to satisfy demand in quarter 2 cost CPI $1.50 each to hold in inventory, but maximum inventory cannot exceed 300 seats. Define the decision variables needed to model this problem. Give the objection function. Write the constraints. What is the final answer? Explain in detail.

Answer 2

Question

Chapter 5.S, Problem 12P

a)

Summary Introduction

To construct: A decision tree.

Introduction:

Decision tree is one of the methods used in decision-making process. It would graphically represent the available alternatives and states of nature. It would also mention the payoffs and probabilities of the alternatives. It helps to choose the best alternative that would give the best result among the alternatives.

b)

Summary Introduction

Approach: 1

To identify: Decision making under uncertainty.

Maximax decision:

Maximax is the decision making method which come decision making under uncertainty. This method finds an alternative that maximizes the maximum outcome of each alternative or we can say that calculating the maximum outcome within every alternative.

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Answer 3

Question

Chapter 5.S, Problem 12P

a)

Summary Introduction

To construct: A decision tree.

Introduction:

Decision tree is one of the methods used in decision-making process. It would graphically represent the available alternatives and states of nature. It would also mention the payoffs and probabilities of the alternatives. It helps to choose the best alternative that would give the best result among the alternatives.

b)

Summary Introduction

Approach: 1

To identify: Decision making under uncertainty.

Maximax decision:

Maximax is the decision making method which come decision making under uncertainty. This method finds an alternative that maximizes the maximum outcome of each alternative or we can say that calculating the maximum outcome within every alternative.

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Answer 4

Question

Chapter 5.S, Problem 12P

a)

Summary Introduction

To construct: A decision tree.

Introduction:

Decision tree is one of the methods used in decision-making process. It would graphically represent the available alternatives and states of nature. It would also mention the payoffs and probabilities of the alternatives. It helps to choose the best alternative that would give the best result among the alternatives.

b)

Summary Introduction

Approach: 1

To identify: Decision making under uncertainty.

Maximax decision:

Maximax is the decision making method which come decision making under uncertainty. This method finds an alternative that maximizes the maximum outcome of each alternative or we can say that calculating the maximum outcome within every alternative.

Expert Solution & Answer

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Answer 5

Chapter 5.S, Problem 12P

a)

Summary Introduction

To construct: A decision tree.

Introduction:

Decision tree is one of the methods used in decision-making process. It would graphically represent the available alternatives and states of nature. It would also mention the payoffs and probabilities of the alternatives. It helps to choose the best alternative that would give the best result among the alternatives.

b)

Summary Introduction

Approach: 1

To identify: Decision making under uncertainty.

Maximax decision:

Maximax is the decision making method which come decision making under uncertainty. This method finds an alternative that maximizes the maximum outcome of each alternative or we can say that calculating the maximum outcome within every alternative.

Answer 6

Chapter 5.S, Problem 12P

a)

Summary Introduction

To construct: A decision tree.

Introduction:

Decision tree is one of the methods used in decision-making process. It would graphically represent the available alternatives and states of nature. It would also mention the payoffs and probabilities of the alternatives. It helps to choose the best alternative that would give the best result among the alternatives.

Answer 7

Chapter 5.S, Problem 12P

a)

Summary Introduction

To construct: A decision tree.

Introduction:

Decision tree is one of the methods used in decision-making process. It would graphically represent the available alternatives and states of nature. It would also mention the payoffs and probabilities of the alternatives. It helps to choose the best alternative that would give the best result among the alternatives.

Answer 8

b)

Summary Introduction

Approach: 1

To identify: Decision making under uncertainty.

Maximax decision:

Maximax is the decision making method which come decision making under uncertainty. This method finds an alternative that maximizes the maximum outcome of each alternative or we can say that calculating the maximum outcome within every alternative.

Answer 9

b)

Summary Introduction

Approach: 1

To identify: Decision making under uncertainty.

Maximax decision:

Maximax is the decision making method which come decision making under uncertainty. This method finds an alternative that maximizes the maximum outcome of each alternative or we can say that calculating the maximum outcome within every alternative.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 5.8 - Explain the meaning of the phrase Hours versus...Ch. 5.8 - Prob. 1.2RQ Ch. 5.8 - Prob. 1.3RQ Ch. 5.8 - Prob. 1.4RQ Ch. 5.8 - Prob. 1.5RQ Ch. 5.S - Prob. 1DRQ Ch. 5.S - Prob. 2DRQ Ch. 5.S - Explain the term bounded rationality.Ch. 5.S - Prob. 4DRQ Ch. 5.S - Prob. 5DRQ

Solution Summary: The author explains that a decision tree is one of the methods used in decision-making process. It would graphically represent the available alternatives and states of nature.

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