Operations Management: Sustainability And Supply Chain Management, Global Edition
12th Edition
ISBN: 9781292148632
Author: RENDER, Munson Heizer
Publisher: PEARSON
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Question
Chapter A, Problem 7P
a.
Summary Introduction
To determine: The highest possible expected monetary value.
Introduction:
EMV: Expected monetary value (EMV) is the expected value or payout that has different possible state of nature, each with their associated possibilities.
b.
Summary Introduction
To determine: Expected value with perfect information
Introduction
Expected value with perfect information is average expected return which we have perfect information about their state of nature before decision has to be taken
It is average worth of information which we have, basically expected value if the perfect information is available before decision made
c.
Summary Introduction
To determine: The expected value of perfect information
Introduction: The maximum value willing to pay in order to gain for information. In EVPI we determine the amount which is willing to pay for the perfect information is said to be EVPI.
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Problem 13-11 (Algorithmic)
Following is the payoff table for the Pittsburgh Development Corporation (PDC) Condominium Project. Amounts are in millions of dollars.
State of Nature
Decision Alternative
Strong Demand S1
Weak Demand S2
Small complex, d1
7
5
Medium complex, d2
14
6
Large complex, d3
20
-8
Suppose PDC is optimistic about the potential for the luxury high-rise condominium complex and that this optimism leads to an initial subjective probability assessment of 0.8 that demand will be strong (S1) and a corresponding probability of 0.2 that demand will be weak (S2). Assume the decision alternative to build the large condominium complex was found to be optimal using the expected value approach. Also, a sensitivity analysis was conducted for the payoffs associated with this decision alternative. It was found that the large complex remained optimal as long as the payoff for the strong demand was greater than or equal to $17.5 million and as long as the payoff…
Problem 13-11 (Algorithmic)
Following is the payoff table for the Pittsburgh Development Corporation (PDC) Condominium Project. Amounts are in millions of dollars.
State of Nature
Decision Alternative
Strong Demand S1
Weak Demand S2
Small complex, d1
8
6
Medium complex, d2
14
5
Large complex, d3
19
-8
Suppose PDC is optimistic about the potential for the luxury high-rise condominium complex and that this optimism leads to an initial subjective probability assessment of 0.8 that demand will be strong (S1) and a corresponding probability of 0.2 that demand will be weak (S2). Assume the decision alternative to build the large condominium complex was found to be optimal using the expected value approach. Also, a sensitivity analysis was conducted for the payoffs associated with this decision alternative. It was found that the large complex remained optimal as long as the payoff for the strong demand was greater than or equal to $17.25 million and as long as the payoff…
Given is a decision payoff table and a Sub Decision Payoff Table. Use Minimax Regret as an evaluation criterion to evaluate alternatives.
Future Demand
Alternatives
Low
Moderate
High
Small Facility
31
18
15
Medium Facility
20
35
21
Large Facility
-10
31
35
Alternatives
Worst Regrets
Small Facility
?
Medium Facility
?
Large Facility
?
a) The worst regrets for alternative Small Facility is ( ) b) The worst regrets for alternative Medium Facility is ( ) c) The worst regrets for alternative Large Facility is ( ) d) The best course of action or decision by using Minimax Regret is to select ( ) facility
Chapter A Solutions
Operations Management: Sustainability And Supply Chain Management, Global Edition
Ch. A - Prob. 1DQCh. A - Prob. 2DQCh. A - Prob. 3DQCh. A - Prob. 4DQCh. A - Prob. 5DQCh. A - Question: 6. Explain how decision trees might be...Ch. A - Prob. 7DQCh. A - Prob. 8DQCh. A - Question 9. Identify the five steps in analyzing a...Ch. A - Prob. 10DQ
Ch. A - Question 11. The expected value criterion is...Ch. A - Question 12. When are decision trees most useful?Ch. A - Given the following conditional value table,...Ch. A - Prob. 2PCh. A - Prob. 3PCh. A - Jeffrey Helm owns a health and fitness center...Ch. A - Prob. 5PCh. A - Prob. 6PCh. A - Prob. 7PCh. A - Prob. 8PCh. A - Prob. 9PCh. A - Prob. 10PCh. A - The University of Miami bookstore stocks textbooks...Ch. A - Palmer Jam Company is a small manufacturer of...Ch. A - Prob. 13PCh. A - Prob. 14PCh. A - Prob. 21PCh. A - Prob. 22PCh. A - Prob. 23PCh. A - Prob. 24PCh. A - Prob. 25PCh. A - Prob. 26PCh. A - Philip Musa can build either a large video rental...Ch. A - Prob. 28PCh. A - Prob. 29PCh. A - Question A.24 On the opening page of Module A and...Ch. A - Question Warehouse Tenting at the Port of Miami...Ch. A - Question Warehouse Tenting at the Port of Miami...Ch. A - Question Warehouse Tenting at the Port of Miami...
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