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Answer the following questions based on the Strategy Region graph given below. The objective is to maximize the expected value. Support your answer. • If grant award is $50,000, what is the EV of the optimal strategy? • If grant award is above approximately $57,000, what is the optimal strategy?

Answer the following questions based on the Strategy Region graph given below. The objective is to maximize the expected value. Support your answer. • If grant award is $50,000, what is the EV of the optimal strategy? • If grant award is above approximately $57,000, what is the optimal strategy?

Practical Management Science
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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Answer the following questions based on the Strategy Region graph given below. The objective is to maximize the expected value. Support your answer.

• If grant award is $50,000, what is the EV of the optimal strategy?

• If grant award is above approximately $57,000, what is the optimal strategy?

 

 

 

 

Expected Value 25000 20000 15000 10000 5000 0 -5000 -10000 40000 Strategy Region of Decision Tree 'COMTECH' Expected Value of Node 'Proposal?' (D40) With Variation of Branch Value 'Receive Grant' of Node 'Grant' (E22) 45000 50000 55000 60000 65000 70000 Grant Award 75000 80000 85000 90000 Submit Proposal Don't Submit Proposal 95000 100000 105000 110000
Transcribed Image Text:Expected Value 25000 20000 15000 10000 5000 0 -5000 -10000 40000 Strategy Region of Decision Tree 'COMTECH' Expected Value of Node 'Proposal?' (D40) With Variation of Branch Value 'Receive Grant' of Node 'Grant' (E22) 45000 50000 55000 60000 65000 70000 Grant Award 75000 80000 85000 90000 Submit Proposal Don't Submit Proposal 95000 100000 105000 110000
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