Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (11th Edition)
11th Edition
ISBN: 9780134111056
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Question
Chapter A, Problem 17P
a
Summary Introduction
Interpretation:Best alternative by selecting maximin criteria.
Concept Introduction: Maximin criteria is to minimize the loss of payoffs by selecting the maximum alternatives.
b
Summary Introduction
Interpretation:Best alternative by selecting maximax criteria.
Concept Introduction: Maximax criteria is to maximize the profit of payoffs by selecting the maximum alternatives.
c
Summary Introduction
Interpretation:Best alternative by selecting laplace criteria.
Concept Introduction:Laplace criterion is equally likely criterion in which alternate in selected which has the highest average.
d
Summary Introduction
Interpretation:Best alternative by selecting minimax regret criteria.
Concept Introduction:Minimax Regret Criteria − The goal is to select the decision with the least regret. Regret is calculated by subtracting the payoff of each decision corresponding to the event from the maximum payoff of the event.
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Robert Ragsdale is trying to decide if he should purchase repair and replacement insurance on a new laptop computer that he is planning to purchase. The policy costs $400.00 at the time of purchase, and over the next three years will replace the laptop if it is stolen or repair it if it is broken. The following table contains the total costs of this decision.
Which alternative is best, according to each of the following
decision criteria?
Maximin
Maximax
Laplace
Minimax regret
A decision maker has prepared the following payoff table.
States of Nature
Alternative
High
Low
100
Buy
Rent
80
45
Lease
50
40
Using the Maximin criterion, what is the best decision and the expected payoff?
Best decision
Payoff
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.
State of Nature
Rezoning Approved
Rezoning Not Approved
Decision Alternative
52
Purchase, d
610
-200
Do not purchase, d,
(a) If the probability that the rezoning will be approved is 0.5, what decision is recommended?
O purchase
O do not purchase
What is the expected profit (in dollars)?
(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…
Chapter A Solutions
Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (11th Edition)
Ch. A - Mary Williams, owner of Williams Products, is...Ch. A - Prob. 2PCh. A - An interactive television service that costs $10...Ch. A - A restaurant is considering adding fresh brook...Ch. A - Spartan Castings must implement a manufacturing...Ch. A - A news clipping service is considering...Ch. A - Prob. 7PCh. A - Techno Corporation is currently manufacturing an...Ch. A - The Tri-County Generation and Transmission...Ch. A - Prob. 10P
Ch. A - Tri-County G&T sells 150,000 MWh per year of...Ch. A - The Forsite Company is screening three ideas for...Ch. A - Prob. 13PCh. A - Prob. 14PCh. A - Prob. 15PCh. A - Build-Rite Construction has received favorable...Ch. A - Prob. 17PCh. A - Prob. 18PCh. A - Prob. 19PCh. A - Prob. 20PCh. A - Prob. 21PCh. A - Prob. 22PCh. A - Prob. 23PCh. A - Prob. 24P
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