The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature. Decision Alternative d₁ d₂ States of Nature 51 52 53 230 80 80 5 80 55 Suppose that the decision maker obtained the probabilities P(S₁) = 0.65, P(s₂) = 0.15, and P(53) = 0.20. Use the expected value approach to determine the optimal decision. EV(d₁) = EV(d₂) = The optimal decision is ? ✓.
Q: The Dreamscape Production (DP)) is considering producing a pilot for a comedy series in the hope of…
A: Given, State of Nature…
Q: Wheels Distributors sells three types of tires to the commercial market. Type A. Type B and Type…
A: The expected value of perfect information is the price that one would be willing to pay in order to…
Q: The weather evolves in a probabilistic manner based on many factors from one day to the next.…
A:
Q: The following payoff table snows profit för å decision analysis problem with two decision…
A: Decision analysis (DA) is a type of decision-production. The decision includes distinguishing and…
Q: The operations manager for a water taxi company wants to decide whether to purchase a small, medium,…
A: It is a decision-making method and it is calculated by multiplying the possible outcomes of an…
Q: Given the following payoff table with the profits ($m), a firm might expect alternative investments…
A: Since you have submitted a question with multiple subparts, as per guidelines we have answered the…
Q: Chemitronix Ltd. is a microchips manufacturing company. It was found that the business is at the…
A: Expected monetary value = Chance of gain* Monetary gain + Chance of loss*Monetary loss For…
Q: 1. Consider the decision table given below. Find which Profits decision will be taken, as a function…
A: The decision table is :ProfitsN1N2N3N4S1c346S22224S33219S46613The aim is to tell the selection of…
Q: The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan,…
A: Given- The state-of-nature probabilities and relevant conditional probabilities are as follows:…
Q: A business wants to decide whether to launch a new product. If the product is launched there are two…
A: Decision tree helps in taking the right decision which can reduce costs and increase profits.
Q: A decision maker's worst option has an expected value of $1,000, and her best option has an expected…
A: Formula:- The expected value of perfect information= Expected value with perfect information -…
Q: ABC Company, a soft-drink vendor, has created a table of costs for four stocking decisions for two…
A: Effective decision-making results from collecting valid and accurate information from the market…
Q: A decision tree is a graphic display of the decision process that indicates decision alternatives,…
A: THE ANSWER IS AS BELOW:
Q: The following payoff table shows profit for a decision analysis problem with two decision…
A: Given data: Decision Alternative State of nature S1 S2 S3 d1 260 110 35 d2 110 110 85…
Q: Many decision problems have the following simplestructure. A decision maker has two possible…
A: Consider a generalized decision maker's problem. The decision-maker has to decide between decision 1…
Q: You are given a payoff table: Positive market Negative market Probabililty 0.40 0.60 Alternatives Go…
A: NO GO is the best alternative as lo as long as the probability of option as it have higher expected…
Q: Consider the following payoff (cost) table with probabilities for each state of nature (s) Decisions…
A: Given data is State of nature Decision s1 s2 D1 3 17 D2 8 20 Probability 0.1 0.9
Q: A decision table describes results associated with which of the following A) Two decision…
A: Find the answers below: The Correct answer is A) Two decision Variables
Q: A farmer is considering planting live possible crop mixes. The outcomes depend on the weather (dry,…
A: Given- Dry Average Rainy Mix A -1 1 9 Mix B 1 -1 5 Mix C -1 5 4 Mix D 2 2 3 Mix E 5 3…
Q: The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan,…
A: Given data is Ps1 = 0.35 Ps2 = 0.35 Ps3 = 0.30
Q: The state-of-nature probabilities are P(s1) = 0.35, P(s2) = 0.35, and P(s3) = 0.30. a.Use expected…
A: Below is the solution:-
Q: Suppose you want to mine for gold. Your decisions are to build a mine or not, and to hire a…
A: THE ANSWER IS AS BELOW:
Q: If you want to invest in a project that cost $3.5 million. As we are unsure about the future demand,…
A: Decision analysis is a part of business operations where the organization has to take a decision…
Q: A financial institution is considering investing in a portfolio of stocks. How can decision theory…
A: Decision theory, in simple terms, is a framework or set of principles that helps individuals or…
Q: PT. Corona is currently trying to determine the size of the computer system which will provide…
A: Given data is
Q: Here are the changes to the original problem and the revised conditions for this decision-making…
A: Note: - Since we can answer only up to three subparts we will answer the first three subparts(a, b,…
Q: Three decision makers have assessed utilities for the following decision problem (payoff in…
A: Given data: Payoff Table: Decision Alternative S1 S2 S3 d1 20 50 -20 d2 80 100 -100…
Q: The following payoff table shows profit for a decision analysis problem with two decision…
A: The expected value approach is a decision-making method that takes into account the probability of…
Q: A farmer is trying to decide if continuing to farm is the correct thing to do. Yields on his fields…
A: A decision tree is the decision assistance tool that practices a tree-like pattern of decisions…
Q: A decision maker using an exponential utility function would prefer a random payoff with an…
A: ANSWER 1: TRUE EXPLANATION : A decision maker who uses exponential utility function is risk-loving.…
Q: A local real estate investor in Kingston is considering three alternative investments: a motel, a…
A: Decision making is a process which helps to identifying the best suitable decision from all…
Q: A small parts manufacturer has just engineered a new product for the automotive industry. In order…
A: Usually we know only the states of nature and the probabilities of the state of nature. But we do…
Q: The CrystalTip Company has a production plan. The company wants to determine which of their premium…
A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…
Q: A paint company has three sources for buying bright red pigment for its paints: Vietnam, Taiwan, and…
A: A paint company has 3 sources to buy red pigment for its paints:VietnamTaiwanThailandThe…
Q: Calculating outcomes as equally likely would BEST describe: O a. Maximax criterion O b. Laplace…
A: As per Bartleby guidelines, we can only solve one question at a time...Kindly upload the other…
Q: A decision maker is looking to minimising costs through three alternative decisions a1 , b2 and c3…
A: 1.
Q: Andrew Thomas, a sandwich vendor at hard rock café annual rockfest, created a table of conditional…
A:
Q: Eunice, in The scenario, wants to determine how each of the 3 companies will decide on possible new…
A: Given data: If a company will launch Product 1 - Gain 125,000 when successful - Lose 125,000 when…
Q: The Ramshead Pub sells a large quantity of beer every Saturday. From past sales records, the pub has…
A: Expected number of barrels=60.10+70.20+80.40+90.25+100.05=0.6+1.4+3.2+2.25+0.5=7.95
Q: Do the following problems using either TreePlan A student is deciding which scholarships (out of…
A: A decision tree identify the best decision from all possible alternative based on the consideration…
Q: The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan,…
A: The objective of the question is to make a decision based on the given payoff table and…
Q: The following payoff table shows profit for a decision analysis problem with two decision…
A: Expected value model is a method that identifies the optimal decision based on the payoff values…
![The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature.
Decision
Alternative
d₁
d₂
States of Nature
51 52 $3
230 80 5
80
80 55
Suppose that the decision maker obtained the probabilities P(5₁) = 0.65, P(S₂) = 0.15, and P(53) = 0.20. Use the expected value approach to determine the optimal decision.
EV(d₂) =
EV(d₂) =
The optimal decision is?.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe0724b00-d512-4d4f-a9d1-6ff45e1cd528%2F2d73d2d4-f51b-443c-a750-e774767f457c%2Fnx29whr_processed.png&w=3840&q=75)
![](/static/compass_v2/shared-icons/check-mark.png)
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 9 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
- The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature. States of Nature Decision Alternative $1 52 53 d1 d2 240 90 15 90 90 65 Suppose that the decision maker obtained the probabilities P(s₁) = 0.65, P(s2) = 0.15, and P(S3) = 0.20. Use the expected value approach to determine the optimal decision. EV(d₁) EV(d2) = = The optimal decision is --?--✓The following payoff table shows a profit for a decision analysis problem with two decision alternatives and three states of nature. In order to get full credit, show your all work done step by step including cell calculations using excel functions. State of Nature Decion Alternatives s1 s2 s3 d1 250 100 50 d2 100 75 100 a) Construct a decision tree for this problem. b) Suppose that the decision-maker obtains the probabilities P(s1)=0.65, P(s2)=0.15, and P(s3)=0.20. Use the expected value approach to determine the optimal decision.The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature. Decision Alternative d₁ d₂ States of Nature 51 5₂ 53 260 110 35 110 110 85 The probabilities for the states of nature are P(S₁) = 0.65, P(S₂) = 0.15, and P(s) = 0.20. (a) What is the optimal decision strategy if perfect information were available? If s, then? ;If s₂ then 2 ✓; If s₂ then ? (b) What is the expected value for the decision strategy developed in part (a)? (c) Using the expected value approach, what is the recommended decision without perfect information? What is its expected value? The recommended decision without perfect information is ? EV = (d) What is the expected value of perfect information? EVPI =
- The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature. Decision Alternative = d₁ d₂ States of Nature 51 230 80 $2 $3 80 5 80 55 Suppose that the decision maker obtained the probabilities P(S₁) = 0.65, P(s₂) = 0.15, and P(S3) = 0.20. Use the expected value approach to determine the optimal decision. EV(d₁) EV(d₂)The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in thousands of dollars): Decision State of Nature Alternative Low Demand (S1) Medium Demand (S2) High Demand )S3) Manufacture, d(1) -20 40 100 Purchase, d(2) 10 45 70 The state-of-nature probabilities are P s1= 0.35, P s2= 0.35, and P s3= 0.30 Use expected value to recommend a decision.The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in thousands of dollars): State of Nature Low Demand Medium Demand High Demand Decision Alternative s1 s2 s3 Manufacture, d1 -20 40 100 Purchase, d2 10 45 70 The state-of-nature probabilities are P(s1) = 0.35, P(s2) = 0.35, and P(s3) = 0.30. Use a decision tree to recommend a decision.Recommended decision: Use EVPI to determine whether Gorman should attempt to obtain a better estimate of demand. EVPI: $ fill in the blank 3 A test market study of the potential demand for the product is expected to report either a favorable (F) or unfavorable (U) condition. The relevant conditional probabilities are as follows: P(F | s1) = 0.10 P(U | s1) = 0.90 P(F | s2) = 0.40 P(U |…
- 9. A decision-maker has two alternative courses of action, A1 and A2. There are three possible states of nature, S1, S2, and S3. The table of conditional profits, as well as the probabilities for the states of nature, appear below. Based on this decision table, which decision alternative produces the higher EMV? States of Nature Alternatives S1 S2 S3 A1 10,000 20,000 6,000 A2 5,000 30,000 15,000 Probability 0.3 0.5 0.2 Part 2 The best decision is ▼ a. alternative Upper A 1alternative A1 b. alternative Upper A 2alternative A2 , with an EMV=$________(enter your response as a whole number).The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature: State of Nature Decision Alternative S1 S2 S3 di 150 100 25 d2 100 100 75 (a) Choose the correct decision tree for this problem. (i) (ii) S1 150 150 $2 2 100 di $3 100 25 83 d2 25 100 d2 $2 3 3 100 $3 S3 75 75 (iii) S1 (iv) 150 150 2 2 d2 100 100 100 100 S2 3 3 $2 100 100 d2 $3 di 25 25 $3 4 S3 75 75 |- Select your answer - v (b) If the decision maker knows nothing about the probabilities of the three states of nature, what is the recommended decision using the optimistic, conservative, and minimax regret approaches? Optimistic approach Select your answer - v Conservative approach Select your answer - V Minimax regret approach - Select your answerA landlord can either lease for one or two years or sell offices outrightly for K100 million with payoffs as follows: Lease -100 50 150 Sell 100 100 100 The probability of rejecting is 30%, leasing for one year is 50% and for two years 20%. Required: What is the optimal decision strategy if perfect information were available? What is the expected value of perfect information? 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 S1 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 Required: Find EMV and recommend the course of action Find the…
- The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in thousands of dollars): state of nature low demand medium demnad high demand Decision alternative s1 s2 s3 manufacture d1 -20 40 100 purchase d2 10 45 70 The state-of-nature probabilities are P(s1) = 0.35, P(s2) = 0.35, and P(s3) = 0.30. a. A test market study of the potential demand for the product is expected to report either a favourable (F) or unfavourable (U) condition. The relevant conditional probabilities are as follows: P(F|S1)=0.10 P (U|S1)=0.90 P(F|S2)=0.40 P (U|S2)=0.60 P(F|S3)=0.60 P (U|S3)=0.40 Decision tree leading to market study/ prediction of favorable…The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in thousands of dollars): state of nature low demand medium demnad high demand Decision alternative s1 s2 s3 manufacture d1 -20 40 100 purchase d2 10 45 70 The state-of-nature probabilities are P(s1) = 0.35, P(s2) = 0.35, and P(s3) = 0.30. a. A test market study of the potential demand for the product is expected to report either a favourable (F) or unfavourable (U) condition. The relevant conditional probabilities are as follows: P(F|S1)=0.10 P (U|S1)=0.90 P(F|S2)=0.40 P (U|S2)=0.60 P(F|S3)=0.60 P (U|S3)=0.40 Compute the probabilities by completing the table Sate of…The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in thousands of dollars): state of nature low demand medium demnad high demand Decision alternative s1 s2 s3 manufacture d1 -20 40 100 purchase d2 10 45 70 The state-of-nature probabilities are P(s1) = 0.35, P(s2) = 0.35, and P(s3) = 0.30. a. A test market study of the potential demand for the product is expected to report either a favourable (F) or unfavourable (U) condition. The relevant conditional probabilities are as follows: P(F|S1)=0.10 P (U|S1)=0.90 P(F|S2)=0.40 P (U|S2)=0.60 P(F|S3)=0.60 P (U|S3)=0.40 A.Compute the probabilities by completing the table Sate of…
![Practical Management Science](https://www.bartleby.com/isbn_cover_images/9781337406659/9781337406659_smallCoverImage.gif)
![Practical Management Science](https://www.bartleby.com/isbn_cover_images/9781337406659/9781337406659_smallCoverImage.gif)