If a decision maker can assign probabilities of occurrences to the states of nature then the decision-making environment is Decision Making under Risk.O TrueO FalseNextPreviousNot savedSubmit OizMacBook AirDDF76日000F5F4レ8.

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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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A decision maker is looking to minimising costs through three alternative decisions a1 , b2 and c3 under two states of nature/events S1 and S2 with S2 having a probability of 30% . For a1 payoffs for s1 K100 million and s2 K540 million For a2 payoff for s1 K150 million and s2 –K50 million For a3 payoff for s1 K350 million and s2 K320 million Find EMV and recommend the course of action Find the EMV under certainty Use the EVC to find the EVPI Determine the opportunity loss table Find the course of action that minimises EOL Compare the minimum EOL with the EVPI.
Decision theory under conditions of risk and uncertainty lends itself to severalmathematical techniques. Examine the difference maximin decision criterion and minimax regret decision criterion.
Bias in decision-making happens without a thought in most decisions. Identify a recent or current event in which you think bias was evident in the decision-making process surrounding that event.
Rules of thumb, or heuristics, always help to avoid severe and systematic errors in the decision-making process. Group of answer choices True False
Discuss two common errors in the rational decision-making process of confirmation bias and overconfidence bias.
Which aspect of decision making is NOT ALWAYS part of a decision tree? the sequence of the decision making the states of nature and their probabilities the outcomes of an experiment O the individual decisions involved « Previous
Question 2 An oil company must decide whether or not to drill an oil well in a particular area that they already own. The decision maker (DM) believes that the area could be dry, reasonably good or a bonanza. See data in the table which shows the gross revenues for the oil well that is found. Decision Drill $0 Abandon $0 Probability 0.3 Dry (D) Seismic Results No structure(N) Open(0) Closed (C) Reasonably good(G) $85 $0 0.3 Drilling costs 40M. The company can take a series of seismic soundings at a cost of 12M) to determine the underlying geological structure. The results will be either "no structure", "open structure or "closed structure". The reliability of the testing company is as follows that is, this reflects their historical performance. Bonanza(B) Note that if the test result is "no structure" the company can sell the land to a developer for 50 m. otherwise (for the other results) it can abandon the drilling idea at no benefit to itself. $200 m $0 0.4 Dry(d) 0.7 0.2 0.1…
A conflict of interest can occur when a decision maker’s personal interests interfere to the extent that he or she makes decisions that adversely affect customers or employees. True False
In applying management science tools, a decision-maker commonly use the 7 steps. What are those? Lists and give examples to each steps. Requirement: The examples should be a scenario or a case
How can decision trees be used to make decisions under uncertainty?
Supposed that a decision-maker faced with four decision alternatives and four states of nature develops the following profit payoff table.1. If the decision-maker knows nothing about the probabilities of the four states of nature, what is the recommended decision using the MAXIMAX criterion?2. What decision alternative will he choose if using the MAXIMIN criterion?3. What about MINIMAX REGRET CRITERION?4. What decision would he make if using the criterion of realism at alpha 0.6 is used?
Compare between thequalitative and quantitativeapproaches in the analysesphase of the decision-makingprocess

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If a decision maker can assign probabilities of occurrences to the states of nature then the decision- making environment is Decision Making under Risk. O True