Meega airlines decided to offer direct service from Akron, Ohio to Clearwater Beach, Florida. Management must decide between full-price service using thecompany's new fleet of jet aircraft and a discount-service using smaller capacity commuter planes. Management developed estimates of the contribution to profitfor each type of service based upon three possible levels of demand for service: high, moderate, and low. The following table shows the estimated quarterlyprofits (in thousands of dollars).ServiceFull priceDiscountSelect one:Oa. D2Ob. D3c. D1d. D4Demand for serviceHigh Medium Low760 -430900710650350The probabilities for the demand levels are P(High) = 0.3, P(Medium) = 0.5, and P(Low) = 0.2, respectively.In the payoff table from the previous question, what is the optimal decision under the maximin criterion?

Maximin or Pessimistic decision making model considers the highest payoff indicating decision making…

Answered: In the payoff table from the previous…

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...

See similar textbooks

Similar questions

Apply the PACED decision-making model to a decision you will need to make about your life after high school. You should: define the problem; complete a PACED grid with at least 3 alternatives and 5 criteria; explain how you define (+), (-), and (x) in your evaluation; explain your final decision.
Do the following problems using either TreePlan A student is deciding which scholarships (out of two) to accept. The first scholarship is worth $10,000 but carries the condition that recipients cannot accept another other forms of income (such as other scholarships). The second scholarship is awarded in a competition, where this student has a 50% chance of earning $7,000, a 40% chance of earning $10,000, and a 10% chance of earning $15,000. The student must inform the administrator of the first scholarship whether she will be accepting their offer today. A. Develop a decision tree to determine which scholarship this student should accept (using our normal decision criteria). B. Under what circumstance might the student accept the other scholarship?
4
What is the probability that the satellite described in Solved Problem 4 will fail between 5 and 12years after being placed into earth orbit?
The operations manager for a water taxi company wants to decide whether to purchase a small, medium, or large new boat for the company. The manager estimates that the annual profits (in thousands of dollars) will vary depending upon whether passenger demand is low, moderate, or high, as shown in the following table. Demand Boat Low Medium High Small 50 57 70 Medium 37 79 89 Large 17 51 119 Probability 0.3 0.3 0.4 If the company uses the expected value approach, which size boat will it decide to purchase? O small 000 medium large O none
9. The East Chester Tribune must decide whether to publish a Sunday edition. The publisher thinks the probability is 0.6 that a Sunday edition would be a success and 0.4 that it would be a failure. If it is a success, she will gain $100,000. If it is a failure, she will lose $80,000. a. Construct a decision tree corresponding to the problem, and use backward induction to solve the problem. (Assume that the publisher is risk-neutral.) b. List all forks in the decision tree you constructed; then indicate whether each is a decision fork or a chance fork and state why.
The below table shows a payoff matrix that represents the interaction between two friends, Amanda and Bernardo. They are deciding which city to visit together. Bernardo Inverness Perth Amanda Inverness 7, 4 2.5, 1 Perth 1, 2.5 3, 9 Select all the correct answers. Group of answer choices Amanda's preference is to visit Inverness If this is a sequential game and Bernardo can move first, Amanda's preference is to visit Perth. There are two Nash equilibria in this game If this is a one-shot, simultaneous game, then both players would choose Perth since it is the highest total payoff
A small strip-mining coal company is trying to decide whether it should purchase or lease a new clamshell. If purchased, the “shell” will cost $152,500 and is expected to have a $50,000 salvage value after 6 years. Alternatively, the company can lease a clamshell for only $16,000 per year, but the lease payment will have to be made at the beginning of each year. If the clamshell is purchased, it will be leased to other strip-mining companies whenever possible, an activity that is expected to yield revenues of $9,000 per year. If the company’s MARR is 13% per year, should the clamshell be purchased or leased on the basis of a future worth analysis? Assume the annual M&O cost is the same for both options. The future worth when purchased is $ The future worth when leased is $

Recommended textbooks for you

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Practical Management Science

Operations Management

ISBN:

9781337406659

Author:

WINSTON, Wayne L.

Publisher:

Cengage,

Operations Management

ISBN:

9781259667473

Author:

William J Stevenson

Publisher:

McGraw-Hill Education

Operations and Supply Chain Management (Mcgraw-hi…

Operations Management

ISBN:

9781259666100

Author:

F. Robert Jacobs, Richard B Chase

Publisher:

McGraw-Hill Education

Business in Action

Operations Management

ISBN:

9780135198100

Author:

BOVEE

Publisher:

PEARSON CO

Purchasing and Supply Chain Management

Operations Management

ISBN:

9781285869681

Author:

Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:

Cengage Learning

Production and Operations Analysis, Seventh Editi…

Operations Management

ISBN:

9781478623069

Author:

Steven Nahmias, Tava Lennon Olsen

Publisher:

Waveland Press, Inc.

SEE MORE TEXTBOOKS

In the payoff table from the previous question, what is the optimal decision under the maximin criterion? Select one: a. D2 b. D3 c. D1 d. D4