1 The following decision tree describes a decision problem involving survey information z1 P 300 di 20 I2 0.3 21 P 200 I2 0.3 100 don't use survey 0.4 300 ds 20 use survey survey cost: -5 21 0.4 200 S1 9 100 s2 1-9 300 di 20 I2 0.2 I1 b 200 100 I2 0.2 (a) Describe the specific probabilities that each variable a,b, p, q corresponds to, then deter-

A First Course in Probability (10th Edition)
10th Edition
ISBN:9780134753119
Author:Sheldon Ross
Publisher:Sheldon Ross
Chapter1: Combinatorial Analysis
Section: Chapter Questions
Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...
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1 The following decision tree describes a decision problem involving survey information
300
di
20
*2 0.3
200
d2
100
I2 0.3
don't use survey
0.4
300
ds
20
use survey
survey cost: -5
E1 0.4
200
81 4
d2
100
82 1-9
300
ds
20
I2 0.2
200
d2
100
12 0.2
(a) Describe the specific probabilities that each variable a, b, p, q corresponds to, then deter-
mine the value of each.
(b) Solve the decision tree (using the EMV criterion, i.e. maximise the expected utility).
(c) Determine the values of EMV (without the survey), EMV(survey), EVSI and ENGSI.
Transcribed Image Text:1 The following decision tree describes a decision problem involving survey information 300 di 20 *2 0.3 200 d2 100 I2 0.3 don't use survey 0.4 300 ds 20 use survey survey cost: -5 E1 0.4 200 81 4 d2 100 82 1-9 300 ds 20 I2 0.2 200 d2 100 12 0.2 (a) Describe the specific probabilities that each variable a, b, p, q corresponds to, then deter- mine the value of each. (b) Solve the decision tree (using the EMV criterion, i.e. maximise the expected utility). (c) Determine the values of EMV (without the survey), EMV(survey), EVSI and ENGSI.
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