1. Decision Making Problem SolvingABC Manufacturing is trying to analyze the cost associated with three decision options andfour states of nature. The payoff matrix for this situation is shown below All S are inthousands.State of NatureS3S4Alternativess1S2A120253035A240304020A310603025What decision should be made according to the following decision rules? (show work)(a) Optimistic(b) Pessimistic(c) LaPlace(d) minimax regret

Answer) Optimistic- This choice happens when chief chooses the most idealistic methodology or…

Decision Making Problem Solving ABC Manufacturing is trying to analyze the cost associated with three decision options and four states of nature. The payoff matrix for this situation is shown below All $ are in thousands. State of Nature Alternatives S2 S3 S4 Al 20 25 30 35 A2 40 30 40 20 A3 10 60 30 25 What decision should be made according to the following decision rules? (show work) Ca) Optimistic (b) Pessimistic c) LaPlace d) minimax regret

Decision Making Problem Solving ABC Manufacturing is trying to analyze the cost associated with three decision options and four states of nature. The payoff matrix for this situation is shown below All $ are in thousands. State of Nature Alternatives S2 S3 S4 Al 20 25 30 35 A2 40 30 40 20 A3 10 60 30 25 What decision should be made according to the following decision rules? (show work) Ca) Optimistic (b) Pessimistic c) LaPlace d) minimax regret

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter13: Regression And Forecasting Models

Section13.4: Multiple Regression Models

Problem 12P

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Below pay-off was generated for your investment options. From this pay-off table determine the best decision using decision making under uncertainty: a.Maximax b.Maximin c.Minimax
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Your company must decide whether to introduce a new product. The sales of the product will be either at a high (success) or low (failure) level. The conditional value for this decision is as follows Decision High Low Introduce $4,000,000 -$2,000,000 Do Not Introduce 0 0 Probability 0.3 0.7 You have the option to conduct a market survey to sharpen you market demand estimate. The survey costs $200,000. The survey provides incomplete information about the sales, with three possible outcomes: (1) predicts high sales, (2) predicts low sales, or (3) inconclusive. Such surveys have in the past provided these results Result High Low Predicts High 0.4 0.1 Inconclusive 0.4 0.5 Predicts Low 0.2 0.4 c) Draw the complete decision tree, including the survey option. Explain where the values on the decision tree come from
1. Discuss the process you would employ to develop a suitable balanced scorecard for a tourist site organization and give examples of measures that would be incorporated within it. 2. Discuss how break even analysis can aid management in decision-making. 3. Discuss the practical difficulties associated with the use of breakeven analysis by managers in decision-making.
Need answer fast - In a decision problem under uncertainty where Return-On-Investment (ROI) is the objective pursued, valid decision criteria are (check all that applies) (a) Maximin Regret (b) Minimin (c) Maximax (d) Minimax.
Choose the letter of the correct answer on each questions being asked for each case 1. If the decision maker knows nothing about the probabilities of the four states of nature, what is the recommended decision using MAXIMAX CRITERION? D1 D2 D3 D4 2. What decision alternative will he choose if using MAXIMIN CRITERION? D1 D2 D3 D4 3. What about MINIMAX REGRET CRITERION? D1 D2 D3 D4 4. What decision would he make if using criterion of realism at alpha 0.6 is used? D1 D2 D3 D4
Solve the following problems using the Decision Analysis. Construct first the decision tree, and then use Bayes' Formula to determine the optimal decision. Decision Problems 1. The Quano Company is considering the purchase of mineral rights on a piece of property for P1 million. The price includes a seismic test whether the land is of type X or Y geological formation. The test cannot be done until after the purchase is made. According to reliable information 60% of the land is of type X formation and 40% of the area is of type Y. If the company decides to drill on the land, it will cost P2.5 million. It may hit oil, gas, or a dry well. Drilling experience indicates that the probability of hitting oil is 25% on X formation and 10% on Y formation. The probability of hitting gas is 30% on X formation and 45% on Y formation. The estimated return for an oil well is P5 million and from a gas well, P3 million. Should the company purchase mineral rights?
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