Student Portal | MainBUS-660 Topic 1 DQ 1/ilm/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&inprogress=falseeBookXXState of NatureDecision Alternative Strong Demand S₁ Weak Demand S₂Small complex, d₁76Medium complex, d₂126Large complex, d319-9CengageNOWv2 | Online teachin X MindTap-Cengage LearningProblem 4-11 (Algorithmic)Following is the payoff table for the Pittsburgh Development Corporation (PDC) Condominium Project. Amounts are in millions of dollars.x +Amillion, the large complex remains the best decision.30 GSuppose 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 of0.2 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 associatedwith 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 $15.75 million and as long as the payoff for the weak demand was greater than orequal to -$22 million.a. Consider the medium complex decision. How much could the payoff under strong demand increase and still keep decision alternative da the optimal solution? If required, round your answer to two decimal places.The payoff for the medium complex under strong demand remains less than or equal to $b. Consider the small complex decision. How much could the payoff under strong demand increase and still keep decision alternative de the optimal solution? If required, round your answer to two decimal places.The payoff for the small complex under strong demand remains less than or equal to $million, the large complex remains the best decision.PreviousNextM>O***X? q0₁O

Here, I have been given three alternatives, These are small complex, medium complex, and large…

Answered: a. Consider the medium complex…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

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

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8. Palmer Jam Company is a small manufacturer of several different jam products. One product is an organic jam that has no preservatives, sold to retail outlets. Susan Palmer must decide how many cases of jam to manufacture each month. The probability that demand will be 5 cases is 0.05, for 6 cases it is 0.30, for 7 cases it is 0.50, and for 8 cases it is 0.15. The cost of every case is $45, and the price Susan gets for each case is $90. Unfortunately, any cases not sold by the end of the month are of no value as a result of spoilage. Part 2 Based on the given information, Susan's conditional profits table for jam is: Demand 5 cases 6 cases 7 cases 8 cases Produce p=0.05 p=0.30 p=0.50 p=0.15 5 cases __________ ___________ ___________ ____________ b) The number of cases that Susan should produce to achieve maximum expected value (EMV) is _____ cases. c) The EMV of stocking this number of cases is $_______.
What type of information for decision making does simulation typically provide?
3 II | Here are the changes to the original problem and the revised conditions for this decision-making problem: With a favorable market, John Thompson thinks a large facility would result in a net profit of $195,000 to his firm. If the market is unfavorable, the construction of a large facility would result in $185,000 net loss. A small plant would result in a net profit of $110,000 in a favorable market, but a net loss of $25,000 would occur if the market was unfavorable. Doing nothing would result in $0 profit in either market conditions. a) Create a decision table, b) What is your recommendation if you would apply the Maximax criterion (Optimistic)? Follow the guidance from your textbook and create a table. c) What is your recommendation if you would apply the Maximin Criterion (Pessimistic)? Follow the guidance from your textbook and create a table. d) What is your recommendation if you would apply the Criterion of Realism (Hurwicz Criterion) with a coefficient of realism a =…
Select the components or elements in the formulation of the following model.: Linear optimization model Select one or more: constraints places supliers demands nature decisions strategy customers variants variables probability of states of nature decision-maker cost function payoffs non negativity constraints criterion states of nature criteria preferences criteria matrix players route evaluations capacities irational player
Based on the following payoff table, answer the following: Alternative High Medium Low A 20 20 5 B 25 30 11 C 30 12 13 D 10 12 12 E 50 40 −28 Prior Probability 0.3 0.2 0.5 The Bayes’ decision rule strategy is: Multiple Choice: E. B. C. D. A.
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 6 Medium complex, dz 12 6 Large complex, d3 19 -9 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 $15.75 million and as long as the payoff for the weak demand was greater than or equal to…
2. Using the following table, perform ALL FIVE of the techniques for Decision Making under Uncertainty: Maximax, Maximin, Hurwicz Realism (a=0.7), LaPlace and Minimax Regret. You must show your work for obtaining the points. Large facility Medium-sized facility Small facility No facility STRONG MARKET 550,000 300,000 200,000 0 PROFIT (S) FAIR MARKET 110,000 129,000 100,000 0 POOR MARKET -310,000 -100,000 -32,000 0
Palmer Jam Company is a small manufacturer of several different jam products. One product is an organic jam that has no preservatives, sold to retail outlets. Susan Palmer must decide how many cases of jam to manufacture each month. The probability that demand will be 5 cases is 0.10, for 6 cases it is 0.25, for 7 cases it is 0.50, and for 8 cases it is 0.15 The cost of every case is $45, and the price Susan gets for each case is $90. Unfortunately, any cases not sold by the end of the month are of no value as a result of spoilage. Based on the given information, Susan's conditional profits table for jam is: Demand 5 cases 6 cases 7 cases 8 cases Produce =0.10 0.25 0.50 0.15 5 cases Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Decision Making Under Uncertainty In the Table, we apply the concept of Maximax choice, the Maxmin choice, and the equally likely choice. Given the data/information in the Table, compute for the row average. After that, determine the amount of the ROW AVERAGE that would be adopted to be best alternative. The best alternative is the alternative with the highest value of the row average. In this case, which option is more attractive? Values in PhP State of Nature Favorable Unfavorable Maximum Market Minimum in Row Alternatives Market in Row Row Average Project A 80,000.00 20,000.00 80,000.00 20,000.00 Project B 40,000.00 25,000.00 40,000.00 25,000.00 Project C 30,000.00 10,000.00 30,000.00 10,000.00 Project D (Do Nothing)
Decision matrix below consists of COSTS expected, determine which alternative is dominant using with and without probability techniques (use a 35 and probability of: 20%, 15% ; 15% ; 25% & 25% for S1, S2, 53, 54 and 55 respectively): Using EVPI, what is the computed value. Alternatives S2 53 A1 18 15 A2 20 14 A3 16 25 SI 12 7 13 S4 8 12 10 $5 11 16 17
1) A decision maker using an exponential utility function would prefer a random payoff with an expected value of X to a certain payoff of X. True False 2) In a decision tree, a circular node indicates a point where a random event occurs. True False 3) The optimistic and conservative approaches to decision making will always give the same result. True False
Cheryl Druehl Retailers, Inc., must decide whether to build a small or a large facility at a new location in Fairfax. Demand at the location will either be low or high, with probabilities 0.3 and 0.7, respectively. If Cheryl builds a small facility and demand proves to be high, she then has the option of expanding the facility. If a small facility is built and demand proves to be high, and then the retailer expands the facility, the payoff is $240,000. If a small facility is built and demand proves to be high, but Cheryl then decides not to expand the facility, the payoff is $213,000. If a small facility is built and demand proves to be low, then there is no option to expand and the payoff is $230,000. If a large facility is built and demand proves to be low, Cheryl then has the option of stimulating demand through local advertising. If she does not exercise this option, then the payoff is $60,000. If she does exercise the advertising option, then the response to advertising will…

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