Given the following profit payoff table, which decision would you choose based on a cautiousdecision approach?S1d₁50520S2$320-10d₂80d3100d430055330-20-4025-160d1d2Od₁ and d3○ d3d4

The cautious decision approach, as the name suggests, involves careful consideration and evaluation…

Answered: Given the following profit payoff…

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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Lakewood Fashions must decide how many lots of assorted ski wear to order for its three stores. Information on pricing, sales, and inventory costs has led to the following payoff table, in thousands. Order size 1 lot 2 lots 3 lots (a) Show a regret table. Order size 1 lot 2 lots 3 lots 13 9 6 Low 13 9 6 Low Demand Medium 16 24 32 16 24 32 High 16 32 61 Demand Medium (b) What decision should be made by the optimist? O 1 lot O2 lots 3 lots 16 32 61 High Maximum Regret 2:06 PM
II. + James Scott is considering the possibility of opening a small outfit shop on Sta. Maria District, a few blocks from St. Green Ville College. She has located on a mall that attracts students. To open a small shop, medium sized shop, or no shop at all are her options. The market can be good, average, or bad. The probabilities for these three possibilities are 30% for good market, 50% for an average market, and 20% for bad market. The profit or loss for the said market conditions are given in the table below; ALTERNATIVE Small Shop Medium Sized Shop No Shop GOOD 150,000 200,000 0 AVERAGE 50,000 70,000 0 a) Calculate the Expected Value of Perfect Information (EVPI) b) What do you recommend? BAD -80,000 -120,000 0
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This is the same payoff table used in questions 2 and 3. Below is a payoff table that lists four mortgage options: Decision 1-year ARM 3-year ARM 5-year Arm 30-year fixed Rates Rise $66,645 $62,857 $55,895 $52,276 Outcomes Rates Stable $43,650 $47,698 $50,894 $52,276 4) Which of the following decisions has the best average payoff? CA. 3-year ARM B. 1-year ARM CC. 5-year ARM CD. 30-year Fixed Rates Fall $38,560 $42,726 $48,134 $52,276
A well-known plastic mould and die manufacturer in Toronto intends to expand internationally in anticipation of strong demand and expansion in the plastic die manufacturing sector. use the table beneath. Using the Maximax, Maximin, and equally likely conditions, assist the business in making the best option in an unclear situation. 0.5 for a highly favourable condition, 0.2 for an average demand, and 0.3 for an unfavourable state are the probabilities linked with the states of nature.a) Choose the course of action that will give Andrew the highest predicted monetary value (EMV).b) Determine the anticipated value of perfect information (EVPI).
2. A toy manufacturer has three different mechanisms that can be installed in a doll that it sells. The different mechanisms have three different setup costs (overheads) and variable costs and, therefore, the profit from the dolls is dependent on the volume of sales. The anticipated payoffs are as follows. Light Demand 0.25 $325,000 $300,000 -$400,000 Heavy Demand 0.3 Probability Wind-up action Pneumatic action Electrical action Moderate Demand 0.45 $190,000 $420,000 S170,000 $400,000 $800,000 $240,000 a. What is the EMV of each decision alternative? b. Which action should be selected? c. What is the expected value with perfect information? d. What is the expected value of perfect information? e. What is the expected opportunity loss?
i need help constructing a pay-off the table with the given question :
No probabilities are known for the occurrence of the nature states. Compare the solutions obtained by each of the following criteria: Hurwitz (assume that alpha = 0.8)
Solve it
Lakewood Fashions must decide how many lots of assorted ski wear to order for its three stores. Information on pricing, sales, and inventory costs has led to the following payoff table, in thousands. Order size 2 lots 1 lot 1 lot 3 lots (a) Show a regret table. Order size 2 lots 3 lots Low 13 9 6 Low Demand Medium 16 23 38 High 16 38 61 Demand Medium (b) What decision should be made by the optimist? O 1 lot O2 lots O 3 lots (c) What decision should be made by the conservative? O 1 lot O 2 lots O3 lots (d) What decision should be made using minimax regret? O 1 lot O2 lots O 3 lots High Maximum Regret
No probabilities are known for the occurrence of the nature states. Compare the solutions obtained by each of the following criteria: Savage
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Given the following profit payoff table, which decision would you choose based on a cautious decision approach? S1 $2 $3 d₁ 50 20 -10 d2 80 30 -20 d3 100 30 -40 d4 300 25 25 -160 O d₁ d2 Od₁ and d3 Od3 d4