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9. Business Administration. Each university has strong and weak points and the demand for MBA graduates is uncertain. The availability of jobs, student loans, amd financial support will have a significant impact on Yuxuan's ultimate decision. UPM and UM have comparatively high tuition, which would necessitate Yuxuan take out student loans resulting in possibly substantial student loan debt. In a tight market, degrees with that cachet might spell the difference between a hefty paycheck and a piddling unemployment check. USM and UKM hold the advantage of comparatively low tuition but a more regional appeal in a tight job market. Yuxuan gathers his advisory council of Kip and Pedro to assist with the decision. Together they forecast three possible scenarios for the job market and institutional success and predict

9. Business Administration. Each university has strong and weak points and the demand for MBA graduates is uncertain. The availability of jobs, student loans, amd financial support will have a significant impact on Yuxuan's ultimate decision. UPM and UM have comparatively high tuition, which would necessitate Yuxuan take out student loans resulting in possibly substantial student loan debt. In a tight market, degrees with that cachet might spell the difference between a hefty paycheck and a piddling unemployment check. USM and UKM hold the advantage of comparatively low tuition but a more regional appeal in a tight job market. Yuxuan gathers his advisory council of Kip and Pedro to assist with the decision. Together they forecast three possible scenarios for the job market and institutional success and predict

A First Course in Probability (10th Edition)
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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9. Business Administration. Each university has strong and weak points and the demand for MBA graduates is uncertain. The availability of jobs, student loans, and financial support will have a significant impact on Yuxuan's ultimate decision. UPM and UM have comparatively high tuition, which would necessitate Yuxuan take out student loans resulting in possibly substantial student loan debt. In a tight market, degrees with that cachet might spell the difference between a hefty paycheck and a piddling unemployment check. USM and UKM hold the advantage of comparatively low tuition but a more regional appeal in a tight job market. Yuxuan gathers his advisory council of Kip and Pedro to assist with the decision. Together they forecast three possible scenarios for the job market and institutional success and predict annual cash flows associated with an MBA from each institution. All cash flows in the table are in thousands of dollars. School Scenario 1 Scenario 2 Scenario 3 UPM 95 20 -10 UKM 55 60 60 UM 90 10 80 USM 65 50 60 a. Kip tends to be extremely optimistic. Which decision making criterion would he naturally select and what conclusion would he recommend to Yuxuan? Why? b. Pedro is extremely pessimistic. Which decision making criterion would he naturally select and what conclusion would he recommend to Yuxuan? Why? c. Anis bursts into the meeting and announces that there's another way to consider the issue. Since Yuxuan will have to live with his choice for the rest of his life, he might consider selecting the alternative that will cause him the least pain in hindsight when he compares his outcome with what he might have gained. Using Minimax Regret criterion, what is the best school for this criterion, and why? d. Yuxuan's Uncle Rico believes that the scenarios are not necessarily equally likely, and suggests that the likelihood of occurrence of Scenario 2 is 0.4 and the likelihood of occurrence of Scenarios 1 and 3 are both 0.3. What is the best decision using expected value?
Transcribed Image Text:9. Business Administration. Each university has strong and weak points and the demand for MBA graduates is uncertain. The availability of jobs, student loans, and financial support will have a significant impact on Yuxuan's ultimate decision. UPM and UM have comparatively high tuition, which would necessitate Yuxuan take out student loans resulting in possibly substantial student loan debt. In a tight market, degrees with that cachet might spell the difference between a hefty paycheck and a piddling unemployment check. USM and UKM hold the advantage of comparatively low tuition but a more regional appeal in a tight job market. Yuxuan gathers his advisory council of Kip and Pedro to assist with the decision. Together they forecast three possible scenarios for the job market and institutional success and predict annual cash flows associated with an MBA from each institution. All cash flows in the table are in thousands of dollars. School Scenario 1 Scenario 2 Scenario 3 UPM 95 20 -10 UKM 55 60 60 UM 90 10 80 USM 65 50 60 a. Kip tends to be extremely optimistic. Which decision making criterion would he naturally select and what conclusion would he recommend to Yuxuan? Why? b. Pedro is extremely pessimistic. Which decision making criterion would he naturally select and what conclusion would he recommend to Yuxuan? Why? c. Anis bursts into the meeting and announces that there's another way to consider the issue. Since Yuxuan will have to live with his choice for the rest of his life, he might consider selecting the alternative that will cause him the least pain in hindsight when he compares his outcome with what he might have gained. Using Minimax Regret criterion, what is the best school for this criterion, and why? d. Yuxuan's Uncle Rico believes that the scenarios are not necessarily equally likely, and suggests that the likelihood of occurrence of Scenario 2 is 0.4 and the likelihood of occurrence of Scenarios 1 and 3 are both 0.3. What is the best decision using expected value?
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