The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature.DecisionAlternatived₁d₂States of NatureS1 S2 S3260 110 35110 110 85If S1then ---Select--- ✓ ; If s₂ then ---Select--- ✓ ; If S3 then ---Select---The probabilities for the states of nature are P(s₁) = 0.65, P(s₂) = 0.15, and P(S3) = 0.20.(a) What is the optimal decision strategy if perfect information were available?(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 |---Select---EV =(d) What is the expected value of perfect information?EVPI =

Given data: Decision Alternative State of nature S1 S2 S3 d1 260 110 35 d2 110 110 85…

Answered: The following payoff table shows profit…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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A decision table describes results associated with which of the following A) Two decision variables B) One decision variable and one uncertain variable C) Two uncertain variables D) None of the above
Determine the two best decision alternatives by a pessimistic decision maker. Decision dl d2 d3 d4 d2 and d4 Od1 and d4 Od1 and d2 d3 and d4 States of Nature $1 320 280 d1 and d3 170 450 $2 425 -160 100 220 83 -150 160 325 -175
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GENERATE THE DECISION VARIABLE SOLUTION AND GENERATE A SENSITIVITY REPORT CASE 1. Julia's Food Booth Julia Robertson is a senior at Tech, and she's investigating different ways to finance her final year at school. She is considering leasing a food booth outside the Tech stadium at home football games. Tech sells out every home game, and Julia knows, from attending the games herself, that everyone eats a lot of food. She has to pay $1,000 per game for a booth, and the booths are not very large. Vendors can sell either food or drinks on Tech property, but not both. Only the Tech athletic department concession stands can sell both inside the stadium. She thinks slices of cheese pizza, hot dogs, and barbecue sandwiches are the most popular food items among fans and so these are the items she would sell. Most food items are sold during the hour before the game starts and during half time; thus it will not be possible for Julia to prepare the food while she is selling it. She must prepare…
Alternative A1 A2 Prior Probability State of Nature S1 S2 -40 100 0.4 75 0 0.6 There is an option of paying $100 to have research done to better predict which state of nature will occur. When the true state of nature is S1, the research will accurately predict S1 60% of the time. When the true state of nature is S2, the research will accurately predict S2 80% of the time. What is the posterior probability of S2 given that the research predicts S2?
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.
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A researcher is interested in the relationship between students’ participation in two after school programs and academic achievement. She states the following hypothesis in the description of her study: H1. Children who participate in an after school program that emphasizes critical thinking skills will score higher on measures of academic achievement and self esteem than students who participate in a program that emphasizes rote memorization. What are the variables in this study? What would be good names for the variables? Identify the independent variable(s) and dependent variable(s). Describe how each variable varies and provide justification for why each variable varies the way you describe?
GENERATE GENERATE THE DECISION VARIABLE SOLUTION AND A SENSITIVITY REPORT 3. The Wisham family lives on a farm in South Georgia on which it produces a variety of crops and livestock, including pecans. It has 5 acres of pecan trees that yield approximately 1,000 pounds of unshelled pecans per acre each year. The family uses all of its pecan harvest to produce pecan pies, cookies, 1-pound bags of shelled pecans, and 5-pound bags of unshelled pecans, which it sells in town at the local farmers' market. The family sells pies for $5, packages of a dozen cookies for $3, bags of shelled pecans for $7, and bags of unshelled pecans for $16. A shelled pecan is half the weight of an unshelled pecan. It requires 4 ounces of shelled pecans to make a pie, and 6 ounces of shelled pecans to make a dozen cookies. The pies and cookies are baked in the family oven, and there are 120 hours of baking time available. It takes 55 minutes to bake a batch of 4 pies and 15 minutes to bake a batch of 2 dozen…

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