problem number 2/a,b,and cNo handwritten solution plz stChapter 13 Decision Analysis2. Suppose that a decision maker faced with four decision alternatives and fournature develops the following profit payoff table:Decision AlternativeC.did₂dydaPlant SizeSmallLargeS11411Low1505098DealerHepburn HondaMidtown MotorsHopkins AutomotiveState of Nature829101010a. If the decision maker knows nothing about the probabilities of the four states of naturewhat is the recommended decision using the optimistic, conservative, and minimaregret approaches?b. Which approach do you prefer? Explain. Is establishing the most appropriate apAssume that the payoff table provides cost rather than profit payoffs. What is theproach before analyzing the problem important for the decision maker? Explain.recommended decision using the optimistic, conservative, and minimax regret approaches!3. Southland Corporation's decision to produce a new line of recreational products resultedin the need to construct either a small plant or a large plant. The best selection of plant sizedepends on how the marketplace reacts to the new product line. To conduct an analysis,marketing management has decided to view the possible long-run demand as low, medium, or high. The following payoff table shows the projected profit in millions of dollarsMonthly Cost$299$310$3251081011Long-Run DemandMedium200200"S711Mileage Allowance36,00045,00054,000a.What is the decision to be made, and what is the chance event for Southland's problem?b. Construct an influence diagram.c. Construct a decision tree.d. Recommend a decision based on the use of the optimistic, conservative, and minimaxregret approaches.134. Amy Lloyd is interested in leasing a new Honda and has contacted three automobile deal-ers for pricing information. Each dealer offered Amy a closed-end 36-month lease withno down payment due at the time of signing. Each lease includes a monthly charge and amileage allowance. Additional miles receive a surcharge on a per-mile basis. The monthlylease cost, the mileage allowance, and the cost for additional miles follow:High200500Cost perAdditional Mile$0.15$0.20$0.15Amy decided to choose the lease option that will minimize her total 36-month cost. The di

Th Payoff Table is given below:States of nature…

3. 2. Suppose that a decision maker faced with four decision alternatives and four nature develops the following profit payoff table: Decision Alternative C. dy d₂ dy da 14 11 9 8 State of Nature 9 10 10 10 10 8 10 11 a. If the decision maker knows nothing about the probabilities of the four states of nature what is the recommended decision using the optimistic, conservative, and minim regret approaches? b. Which approach do you prefer? Explain. Is establishing the most appropriate p proach before analyzing the problem important for the decision maker? Explain. Assume that the payoff table provides cost rather than profit payoffs. What is the recommended decision using the optimistic, conservative, and minimax regret approaches Southland Corporation's decision to produce a new line of recreational

3. 2. Suppose that a decision maker faced with four decision alternatives and four nature develops the following profit payoff table: Decision Alternative C. dy d₂ dy da 14 11 9 8 State of Nature 9 10 10 10 10 8 10 11 a. If the decision maker knows nothing about the probabilities of the four states of nature what is the recommended decision using the optimistic, conservative, and minim regret approaches? b. Which approach do you prefer? Explain. Is establishing the most appropriate p proach before analyzing the problem important for the decision maker? Explain. Assume that the payoff table provides cost rather than profit payoffs. What is the recommended decision using the optimistic, conservative, and minimax regret approaches Southland Corporation's decision to produce a new line of recreational

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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