Question

Ashley Miller has three major routes to commute to work: take RiverView Street the entire way, take several back streets, or use the expressway. The traffic patterns are pretty complex. Under good conditions, RiverView Street is the fastest route; however, when it is congested, one of the other routes is usually preferable. Over the past two months, Ashley has tried each route several times under different traffic conditions. Her travel time to work (in minutes) is summarized in the following table. STATES OF NATURE DECISION ALTERNATIVES NO TRAFFIC CONGESTION (minutes) MILD TRAFFIC CONGESTION (minutes) SEVERE TRAFFIC CONGESTION (minutes)

RiverView Street 15 NO TRAFFIC CONGESTION (minutes) 30 MILD TRAFFIC CONGESTION (minutes) 45 SEVERE TRAFFIC CONGESTION (minutes)

Back roads 20 NO TRAFFIC CONGESTION (minutes) 25 MILD TRAFFIC CONGESTION (minutes) 35 SEVERE TRAFFIC CONGESTION (minutes)

Expressway 30 NO TRAFFIC CONGESTION (minutes) 30 MILD TRAFFIC CONGESTION (minutes) 30 SEVERE TRAFFIC CONGESTION (minutes)

1. If nothing is known about the demand probabilities, a. Based on Conservative Approach, which route should Ashley choose to commute to work? b. Using the Minimax Regret Approach, create the Opportunity Loss/Regret Table. What route should Ashley take if she wants to minimize average drive time? 2. Suppose the probabilities for No Traffic Congestion, Mild Traffic Congestion, and Severe Traffic Congestion are 50%, 33%, and 17% respectively, c. Construct a Decision Tree (draw it neatly by using MS Word/MS Excel Drawing Tool OR if you are drawing it by hand, please a ruler) and solve it using Expected Value Approach. What is the recommended decision alternative? d. Calculate the Expected Value of the Perfect Information (EVPI)?

Answer 1

ANSWER :-

Ashley Miller has three noteworthy courses to drive to work: take RiverView Street the whole way, take a few back roads, or utilize the interstate. The traffic examples are entirely mind boggling. Under great conditions,

RiverView Street 15 NO TRAFFIC CONGESTION (minutes) 30 MILD TRAFFIC CONGESTION (minutes) 45 SEVERE TRAFFIC CONGESTION (minutes)

RiverView Street is the quickest course; be that as it may, when it is clogged, one of different courses is typically best. In the course of recent months, Ashley has attempted each highway a few times under various traffic conditions. Her movement time to work (in minutes) is abridged in the accompanying table.

Byways 20 NO TRAFFIC CONGESTION (minutes) 25 MILD TRAFFIC CONGESTION (minutes) 35 SEVERE TRAFFIC CONGESTION (minutes)

which course ought to Ashley drive to work? b. Utilizing the Minimax Regret Approach, make the Opportunity Loss/Regret Table. What course ought to Ashley take in the event that she needs to limit normal drive time? 2. Assume the probabilities for No Traffic Congestion, Mild Traffic

Congestion, and Severe Traffic Congestion are half, 33%, and 17% separately,

c. Build a Decision Tree (draw it flawlessly by utilizing MS Word/MS Excel Drawing Tool OR on the off chance that you are drawing it by hand, please a ruler)

and tackle it utilizing Expected Value Approach. What is the prescribed choice option? d. Ascertain the Expected Value of the Perfect Information (EVPI)

Here we need to find  What route should Ashley take if she wants to minimize average drive time

On the off chance that nothing is thought about the interest probabilities, a. In light of Conservative Approach

Turnpike 30 NO TRAFFIC CONGESTION (minutes) 30 MILD TRAFFIC CONGESTION (minutes) 30 SEVERE TRAFFIC CONGESTION (minutes)

Expected Value of the Perfect Information (EVPI) = 33%, and 17%

= 3.3 +1.7

= 5

Therefore,

EVPI = 5.