Question 1 DO ALL WORK IN EXCEL AND SHOW FORMULAS Patrick Bateman is considering four alternatives Friday night. The payoff for each opportunity will depend on economic and other conditions and are represented in the payoff table below. PoorAverageGoodExcellentReturn videotapes70758095Dinner at Dorsia9540200220Pick up friends in his limo1058595120Design new business cards65105120125 Under which decision making and amount is the:A) optimisticB) pessimisticC) minimaxD) Suppose that the likelihood for each of the scenarios is 0.5, 0.1, 0.35, and 0.05 What is the optimal decision under the expected value approach?E) Suppose that the likelihood for each of the scenarios is 0.5, 0.1, 0.35, and 0.05 What is the expected value of perfect information?

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Answered: Patrick Bateman is considering four…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

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Question 1 DO ALL WORK IN EXCEL AND SHOW FORMULAS

Patrick Bateman is considering four alternatives Friday night. The payoff for each opportunity will depend on economic and other conditions and are represented in the payoff table below.

	Poor	Average	Good	Excellent
Return videotapes	70	75	80	95
Dinner at Dorsia	95	40	200	220
Pick up friends in his limo	105	85	95	120
Design new business cards	65	105	120	125

Under which decision making and amount is the:

A) optimistic
B) pessimistic
C) minimax
D) Suppose that the likelihood for each of the scenarios is 0.5, 0.1, 0.35, and 0.05 What is the optimal decision under the expected value approach?
E) Suppose that the likelihood for each of the scenarios is 0.5, 0.1, 0.35, and 0.05 What is the expected value of perfect information?

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