International Guidance and Controls case - International Guidance and Controls Figure 1 This decision tree corresponds to Figure 1 in the notes Please

International Guidance and Controls case - International...

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International Guidance and Controls - Figure 1 This decision tree corresponds to Figure 1 in the notes. Please note that we are analysing costs and not payoffs. So minimum EMV would be the optimum path. Also note that Excel cannot handle "S" (cost of project lateness) as an alphabetical variable. To overcome this, we need to let a cell in the worksheet represent this variable and link it to the equations that calculate the results. In this worksheet "S" is represented by cell B12. It has been colored yellow for easy identification. Cost of Project Lateness 1.6 80.0% #ADDIN? 3 #ADDIN? #ADDIN? C1 0 #ADDIN? 20.0% #ADDIN? 4.6 #ADDIN? D1 #ADDIN? #ADDIN? #ADDIN? 3.5 #ADDIN? 90.0% #ADDIN? 3 #ADDIN? #ADDIN? C3 0 #ADDIN? 10.0% #ADDIN? 4.6 #ADDIN? 56.0% D2 0 #ADDIN? #ADDIN? #ADDIN? 3.75 #ADDIN? #ADDIN? C2 0 #ADDIN? 80.0% #ADDIN? 3 #ADDIN? #ADDIN? C4 0 #ADDIN? 20.0% #ADDIN? 4.6 #ADDIN? 30.0% D3 0 #ADDIN? #ADDIN? #ADDIN? 3.75 #ADDIN? 40.0% #ADDIN? 3 #ADDIN? #ADDIN? C5 0 #ADDIN? 60.0% #ADDIN? 4.6 #ADDIN? 14.0% D4 0 #ADDIN? #ADDIN? #ADDIN? 3.75 #ADDIN? IGC SW Only HW Now Delay HW OT Late FP UP NP SW Only HW Now OT Late SW Only HW Now Late OT SW Only HW Now Late OT
Sensitivity Analysis on Cost of Project Lateness - Figure 2 This sensitivity analysis corresponds to Figure 2 in the notes. It has been generated by varying Cost of Project Lateness and determining its effect on D1. The first graph just shows the cost frontier. This is obtained from the costs of each decision at different values of Cost of Project Lateness (as was done in class). The second graph shows the costs of each decision and the cost frontier as well. This graph is the same as Figure 2 in the notes. D1 1.2 3.24 1.2 3.24 3.5 3.24 2.8 3.4298 2.8 3.56 3.5 3.4298 2.9 3.4414 2.9 3.58 3.5 3.4414 3 3.453 3 3.6 3.5 3.453 3.1 3.4646 3.1 3.62 3.5 3.4646 3.2 3.4762 3.2 3.64 3.5 3.4762 3.3 3.4878 3.3 3.66 3.5 3.4878 3.4 3.4994 3.4 3.68 3.5 3.4994 3.5 3.5 3.5 3.7 3.5 3.511 3.6 3.5 3.6 3.72 3.5 3.5226 3.7 3.5 3.7 3.74 3.5 3.5342 3.8 3.5 3.8 3.76 3.5 3.5428 3.9 3.5 3.9 3.78 3.5 3.5484 4 3.5 4 3.8 3.5 3.554 4.1 3.5 4.1 3.82 3.5 3.5596 4.2 3.5 4.2 3.84 3.5 3.5652 4.3 3.5 4.3 3.86 3.5 3.5708 4.4 3.5 4.4 3.88 3.5 3.5764 4.5 3.5 4.5 3.9 3.5 3.582 4.6 3.5 4.6 3.92 3.5 3.5876 4.7 3.5 4.7 3.94 3.5 3.5932 4.8 3.5 4.8 3.96 3.5 3.5988 4.9 3.5 4.9 3.98 3.5 3.6044 5 3.5 5 4 3.5 3.61 5.1 3.5 5.1 4.02 3.5 3.6156 5.2 3.5 5.2 4.04 3.5 3.6212 5.3 3.5 5.3 4.06 3.5 3.6268 5.4 3.5 5.4 4.08 3.5 3.6324 5.5 3.5 5.5 4.1 3.5 3.638 5.6 3.5 5.6 4.12 3.5 3.6436 5.7 3.5 5.7 4.14 3.5 3.6492 5.8 3.5 5.8 4.16 3.5 3.6548 5.9 3.5 5.9 4.18 3.5 3.6604 6 3.5 6 4.2 3.5 3.666 6.1 3.5 6.1 4.22 3.5 3.6716 6.2 3.5 6.2 4.24 3.5 3.6772 6.3 3.5 6.3 4.26 3.5 3.6828 6.4 3.5 6.4 4.28 3.5 3.6884 6.5 3.5 6.5 4.3 3.5 3.694 6.6 3.5 6.6 4.32 3.5 3.6996 6.7 3.5 6.7 4.34 3.5 3.7052 6.8 3.5 6.8 4.36 3.5 3.7108 6.9 3.5 6.9 4.38 3.5 3.7164 7 3.5 7 4.4 3.5 3.722 7.1 3.5 7.1 4.42 3.5 3.7276 7.2 3.5 7.2 4.44 3.5 3.7332 7.3 3.5 7.3 4.46 3.5 3.7388 7.4 3.5 7.4 4.48 3.5 3.7444 7.5 3.5 7.5 4.5 3.5 3.75 7.6 3.5 7.6 4.52 3.5 3.75 7.7 3.5 7.7 4.54 3.5 3.75 7.8 3.5 7.8 4.56 3.5 3.75 7.9 3.5 7.9

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