State of Nature |
||
Decision Alternative |
S1 |
S2 |
D1 |
100 |
300 |
D2 |
400 |
200 |
P(F) = 0.56 P(S1/F) = 0.57 P(S1/U) = 0.18 P(S1) = 0.40
P(U) = 0.44 P(S2/F) = 0.43 P(S2/U) = 0.82 P(S2) = 0.60
EVPI=60
EVSI =340
A management company must first decide whether to undertake a market research survey. If the mark...
2. Assume you are faced with the following decision alternatives and two states of nature. The profit payoff table is shown below States of Nature Prob (S D1 D2 D3 S1 0.60 100 50 40 S2 0.40 20 50 80 Decision Alternatives a) Do you think undertaking a market research study, with a cost of 25, would be justified in this case? b) What should the probabilities of states 1 and 2 be that options D1 and D3 will have...
5. The Gorman Manufacturing Company decides 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 of the product. The following payoff table shows the projected profit (in thousands of dollars) State of Nature Low Demand Mediumm Demand High Demand Decision Alternative Manufacture, d1 -20 40 100 Purchase, d2 10 45 70 The state probabilities are as follows: P(s3) 0.30 P(%) 0.35, P(82)-0.35, and...
The following payoff table shows the profit for a decision problem with two states of nature and two decision alternatives: State of Nature Decision Alternative s1 10 4 S2 d1 d2 (a) Suppose P(S1)-0.2 ad P(s2)-0.8. What is the best decision using the expected value approach? Round your answer in one decimal place The best decision is decision alternative d2 , with an expected value of 3.2 (b) Perform sensitivity analysis on the payoffs for decision alternative d1. Assume the...
29. A firm has to decide which one of three new products to launch. The profitability of each product depends on the level of demand. The research conducted by the firm suggests that the demand for these types of products can be high, medium, and low with different probabilities. The decision problem faced by the firm is presented in the form of a payoff matrix (profits) as shown below: States of Nature High Medium Low Decision Alternatives s1 s2 s3...
A real estate investor has The opportunity to purchase land currently zoned residential. If the county board approves a request to resume the property as commercial within the next year, the investor will be able to lease the land to a large discount firm that wants to open a new store on the property. However, if the zoning change is not approved, the investor will have to sell the property at a loss. Profits (In thousands of dollars) are shown...
Problem 4-21 (Algorithmic) A real estate investor has the opportunity to purchase land currently zoned residential. If the county board approves a request to rezone the property as commercial within the next year, the investor will be able to lease the land to a large discount firm that wants to open a new store on the property. However, if the zoning change is not approved, the investor will have to sell the property at a loss. Profits (in thousands of...
*****PLEASE ONLY ANSWER PART C****** A real estate investor has the opportunity to purchase land currently zoned as residential. If the county board approves a request to rezone the property as commercial within the next year, the investor will be able to lease the land to a large discount firm that wants to open a new store on the property. However, if the zoning change is not approved, the investor will have to sell the property at a loss. Profits...
Please help with these parts!
Problem 13-19 Hale's TV Productions is considering producing a pilot for a comedy series in the hope of selling it to a major television network. The network may decide to reject the series, but it may also decide to purchase the rights to the series for either one or two years. At this point in time, Hale may either produce the pilot and wait for the network's decision or transfer the rights for the pilot...
please including the steps of each question
Question B6 A soft drink company is going to develop a new flavor of soft drink so as to maximise its profit The new flavor is either mango (d) or pineapple (d). The sales of the new flavored soft drink depend on the demand of the market which is either low (si) or high (52). Estimated profits (in millions HKS) and probability assessments of low and high demands are as follows: Decision Alternative...
Q 1 Investment advisers estimated the stock market profit for four market segments with different condition are as follows. Market Segment improving Moderate stable declining Computer 10 8 6 -4 Financial 8 7 5 -3 Manufacturing 6 7 4 -2 Pharmaceuticals 5 6 6 -1 Economic condition Which payoffs an optimistic decision maker can choose? A / 10 , 8 , 6 , 5 B/10 , 8 , 6 , -4 C/10 , 8 , 7 , 6 D /...