The Dallas Mavericks trail by two points and have theball with 10 seconds remaining. They must decide whetherto take a two- or a three-point shot. Assume that once theMavericks take their shot, time expires. The probability thata two-point shot is successful is TWO, and the probabilitythat a three-point shot is successful is THREE. If the gameis tied, an overtime period will be played. Assume that thereis a .5 chance the Mavericks will win in overtime. (Note:This problem is often used on Microsoft job interviews.)a Give a rule based on the values of TWO and THREEthat tells Dallas what to do.b Typical values for an NBA team are TWO .45 andTHREE .35. Based on this information, what strategyshould most NBA teams follow?

The Dallas Mavericks trail by two points and have theball with 10 seconds remaining. They must decide whetherto take a two- or a three-point shot. Assume that once theMavericks take their shot, time expires. The probability thata two-point shot is successful is TWO, and the probabilitythat a three-point shot is successful is THREE. If the gameis tied, an overtime period will be played. Assume that thereis a .5 chance the Mavericks will win in overtime. (Note:This problem is often used on Microsoft job interviews.)a Give a rule based on the values of TWO and THREEthat tells Dallas what to do.b Typical values for an NBA team are TWO .45 andTHREE .35. Based on this information, what strategyshould most NBA teams follow?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 70P

See similar textbooks

Similar questions

ACME, Inc. firm was trying to decide which of the four projects it should submit a bid for, There is a 50% probability of certain event occurring that ACME firm will win the contract for project 1 which is estimated to be worth $120,000 in profit. There is a 50% probability that it will not win the contract for Project 1, and the outcome is estimated to be -$50,000. Suppose for a second project (project 2), there is a 30% probability that the firm will lose $60,000, a 40% probability that it will win $50,000, and a 30% probability that it will earn $100,000. In project 3, there is a 70% chance of making $20,000 but there is also a risk of losing $5,000 as well with 30% probability. A fourth project (Project 4) involves 30% chance of making $40,000, 30% chance of making $30,000, and 20% chance of making $20,000. There is also a 20% chance of losing $50,000 in the same project. Draw a (decision tree) diagram and calculate the EMV for each project. Write a paragraph explaining which…
4. "Family Man," a construction company, is considering whether to bid on a contract for a new housing complex. The cost of preparing a bid USD 200,000. “Family Man" has a 0.8 probability of winning the contract, if it submits the bid. If "Family Man" wins the bid, it has to pay USD 2000,000 to be a project partner of the project. As per the usual practice, "Family Man" will then consider consulting a market research firm "Marquess" to conduct a market survey to forecast the demand of housing complex before beginning the construction. "Marquess" charges a fee of USD 150,000. Now, the demand scenario can be either "High demand" or "Low demand." "Family Man" gets a revenue of USD 5000,000 and USD 3000,000 in case of "High demand" and "Low demand" scenario, respectively. On the other hand, instead of construction, "Family Man" has a provision of selling its project rights to another project partner construction company at the price USD 3500,000. As per the historical data, "Marquess"…
Andy and Kim live together. Andy may invest $6,000 (possibly by taking on an extra job to earn the additional money) in Kim's education this year. This investment will raise Kim's future earnings by $28,000 (in present value terms). If they stay together, they will share the benefit from the additional earnings. However, the probability is 80% that they will split up in the future. If they were married (or in a civil union) and then split, Andy would get half of Kim's additional earnings. If they were living together without any legal ties and they split, then Andy would get nothing. Suppose that Andy is risk neutral. Will Andy invest in Kim's education? Does your answer depend on the couple's legal status? A. Andy will not invest in Kim's education regardless of legal ties. B. Andy will invest in Kim's education only if they do not have legal ties. C. Andy will invest in Kim's education only if they have legal ties. D. Andy will invest in Kim's education regardless of legal ties. E.…
Imagine you are a deep sea diver in search of lost treasure. You have it on good authority that there is a shipwreck off the coast of Maryland, in one of three locations (call them A, B, and C). Based on historical records of sea routes, you estimate that there is an 78% probability the ship is at location A, a 15% probability that it is at location B, and a 7% probability that it is at location C. Unfortunately, visibility and other diving conditions vary widely among the locations, affecting your chances of uncovering treasure: in a single dive, you estimate that you have only a 5% chance of finding a shipwreck at location A, while you have a 70% chance of finding a shipwreck at location B, and an 80% chance of finding a shipwreck at location C. a) If you can only dive once, which location do you choose to maximize your chances of finding the shipwreck? b) Suppose you dive in your chosen location, and do not find the ship. How does this change the probabilities of the ship being in…
If the farmer uses pesticides he expects a crop of 60,000 bushels; if he does not use pesticides he expects a crop of 55,000 bushels. The cost of pesticides is $20,000 and the other costs associated with planting and harvesting the crop total $450,000. The price of corn at harvest time will either be $10.00 with probability of 0.50 or it will be $12.00 with probability 0.50, so if the farmer decides to sell the crop at harvest, the expected price per bushel that he will receive is $11.00. What will be his total production cost if he uses pesticides? a. $430,000.00 b. $470,000.00 c. $450,000.00 d. $660,000.00
In this version of dice blackjack, you toss a single die repeatedly and add up the sum of your dice tosses. Your goal is to come as close as possible to a total of 7 without going over. You may stop at any time. If your total is 8 or more, you lose. If your total is 7 or less, the house then tosses the die repeatedly. The house stops as soon as its total is 4 or more. If the house totals 8 or more, you win. Otherwise, the higher total wins. If there is a tie, the house wins. Consider the following strategies: Keep tossing until your total is 3 or more. Keep tossing until your total is 4 or more. Keep tossing until your total is 5 or more. Keep tossing until your total is 6 or more. Keep tossing until your total is 7 or more. For example, suppose you keep tossing until your total is 4 or more. Here are some examples of how the game might go: You toss a 2 and then a 3 and stop for total of 5. The house tosses a 3 and then a 2. You lose because a tie goes to the house. You toss a 3 and then a 6. You lose. You toss a 6 and stop. The house tosses a 3 and then a 2. You win. You toss a 3 and then a 4 for total of 7. The house tosses a 3 and then a 5. You win. Note that only 4 tosses need to be generated for the house, but more tosses might need to be generated for you, depending on your strategy. Develop a simulation and run it for at least 1000 iterations for each of the strategies listed previously. For each strategy, what are the two values so that you are 95% sure that your probability of winning is between these two values? Which of the five strategies appears to be best?
Which of the following gambles has the largest objective risk? 20% chance of winning $100 and 80% chance of losing $100 50% chance of winning $10,000 and 50% chance of losing $10,000 50% chance of winning nothing and 50% chance of losing $100 50% chance of winning $100 and 50% chance of winning nothing
Pete is considering placing a bet on the NCAA playoffgame between Indiana and Purdue. Without any furtherinformation, he believes that each team has an equal chanceto win. If he wins the bet, he will win $10,000; if he loses,he will lose $11,000. Before betting, he may pay Bobby$1,000 for his inside prediction on the game; 60% of thetime, Bobby will predict that Indiana will win and 40% ofthe time, Bobby will predict that Purdue will win. WhenBobby says that IU will win, IU has a 70% chance ofwinning, and when Bobby says that Purdue will win, IU hasonly a 20% chance of winning. Determine how Pete canmaximize his total expected profit. What is EVSI? What isEVPI?
Texas Petroleum Company is a producer of crude oil that is considering two drilling projects with the following profit outcomes and associated probabilities: Drilling Project, A Profit -$300,000 100,000 500,000 600,000 Probability (percent) 10 60 20 10 Drilling Project, B Profit -$600,000 100,000 300,000 1,000,000 The manager's attitude toward risk is as follows: Profit ($'000) -600 -300 100 U(II) 0.00 0.05 0.20 Note: U(II) stands for utility index of profit. 300 0.30 500 0.45 Probability (percent) 15 25 40 20 600 0.55 1,000 1.00 In making decision under risk, which project will be chosen by the manager of Texas Petroleum Company based on his behaviour toward risk? Also describe the manager's ways of handling decision-making associate with risk. Justify your answers using numerical explanation.
please answer d and e
Suppose that you have two four-sided dice that are each equally weighted (i.e. equal chance of any of the four sides landing face up). One of them has values [12.5968, 2, -2 and -12.5968] , the other [12.5968, 4, -2 and -12.5968] . Which of them has a µ of zero using the probability model approach. 1. [12.5968, 4, -2 and -12.5968] 2. [12.5968, 2, -2 and -12.5968]
Sami Abbasi Health Food stocks five loaves of Vita-Bread. The probability distribution for the sales of VitaBread is listed in the following table. How many loaves will Sami sell on the average?Number of Loaves Sold Probability0 .051 .152 .203 .254 .205 .15