Question

Time Left Question 25 11 point) Bases on the EVU method, which decision alternative would you choose? Average Nature Od O 24 + Decision Alternative Poba bocion Amet Decon Amatve 2 becon Alternate 3 Decision Amatved 31 2 20 27 1 10 1) Decision Alternative 1 2) Decision Alternative 2 3) Decision Alternative 3 4) Decision Alternative 4

Answer 1

25.

	Poor	Avg	Good	EV
Alternative-1	31	31	24	28.9
Alternative-2	10	23	17	18.6
Alternative-3	29	20	13	19.7
Alternative-4	15	27	19	22.2
Probability	0.2	0.5	0.3

So, Alternative-1 is the best

3.

Average (overall) = (100+175+225+135)/4 = 158.75

So, Qtr-3 index = 225/158.75 = 1.417

16.

Totals of frequency = 7+11+6+3+1 = 28

Prob(Sales=90) = 7/28 = 0.25
Prob(Sales=200) = 11/28 = 0.3829

So, PRob(Sales <= 2000 = Prob(Sales=90) + Prob(Sales=200) = 0.25 + 0.3829 = 0.64

17.

EVUPI = 0.4 * Max payoff for Good + 0.6 * Max payoff for Bad = 0.4*9.6 + 0.6*11.4 = 10.68

14.

Forecast of period-3 = Actual of period-2 = 11.5

So, error = Actual of period-3 - Forecast of period-3 = 4.6 - 11.5 = -6.9

So, absolute error = |-6.9| = 6.9