Practice12 - Maximax Shortage Stable Surplus Motel 8000...

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Unformatted text preview: Maximax Shortage Stable Surplus Motel 8000 15000 20000 Restaurant 2000 8000 6000 Theater 6000 6000 5000 Rank Max 20000 8000 6000 1 2 3 Maximin Shortage Stable Surplus Motel 8000 15000 20000 Restaurant 2000 8000 6000 Theater 6000 6000 5000 Minimax Regret Regret Shortage Stable Surplus Motel 14000 0 0 Restaurant 4000 7000 14000 Theater 0 9000 15000 Min 8000 2000 5000 Rank 3 2 1 Rank Max 14000 14000 15000 1 1 1 3 Hurwicz Shortage Stable Surplus Motel 8000 15000 20000 Restaurant 2000 8000 6000 Theater 6000 6000 5000 Max Min Expected Rank 20000 8000 3200 8000 2000 4400 6000 5000 5400 0.4 0.6 3 2 1 Equal Likelihood Shortage Stable Surplus Motel 8000 15000 20000 Restaurant 2000 8000 6000 Theater 6000 6000 5000 Expected Rank 9000 5333.33 5666.67 1 3 2 Maximax Play Off Tackle Option Toss Sweep Draw Pass Screen Maximin Play Off Tackle Option Toss Sweep Draw Pass Screen Equal Likelihood Play Off Tackle Option Toss Sweep Draw Pass Screen 54 3 1 6 2 8 5 54 3 1 6 2 8 5 54 3 1 6 2 8 5 Defense 63 Wide Tackle Nickel Blitz 2 9 7 8 2 9 16 5 3 4 3 10 20 12 7 2 8 3 1 12 14 3 8 16 Max 9 12 16 10 20 16 Rank 6 4 2 5 1 2 Defense 63 Wide Tackle Nickel Blitz 2 9 7 8 2 9 16 5 3 4 3 10 20 12 7 2 8 3 1 12 14 3 8 16 Min 2 2 5 3 8 5 Rank 1 1 4 3 6 4 Defense 63 Wide Tackle Nickel Blitz 2 9 7 8 2 9 16 5 3 4 3 10 20 12 7 2 8 3 1 12 14 3 8 16 Rank Expected Value 3.2 5.2 6.8 2.4 5 4 5 2 1 6 3 4 Expected Value Decision Sun Visors Umbrellas Weather Rain Overcast Sunshine 0.3 0.15 0.55 500 200 1500 2000 0 900 Expected Value Rank 645 105 1 2 Opportunity Loss Decision Sun Visors Umbrellas Weather Rain Overcast Sunshine 0.3 0.15 0.55 2500 200 0 0 0 2400 Exp Opp Loss 780 1320 Rank 1 2 Heavy Snows Probability 1 0.13 2 0.18 3 0.26 4 0.23 5 0.1 6 0.07 7 0.03 1 3.32 Cost Per Snowfall Expected Cost 30 99.6 The expected cost for Allen to pay to have his drive shoveled is $99.60, far less than the cost of the snow blower. The Break Even point for Allen would be just over 6 years - beyond that, he would save money by purchasing the snow blower. Of course, this assumes there are no other costs or benefits associated with having someone else shovel the drive. For instance, how long does Allen have to wait, and how much fun would Allen have running his snow blower while his neighbors are shoveling away! This also assumes the expected life of the snow blower is more than 6 years. Expected Value 54 0.4 3 1 6 2 8 5 Play Off Tackle Option Toss Sweep Draw Pass Screen Defense 63 Wide Tackle Nickel Blitz 0.1 0.2 0.2 2 9 7 8 2 9 16 5 3 4 3 10 20 12 7 2 8 3 0.1 1 12 14 3 8 16 Expected Value 4.1 3 5 1.9 5.4 1.6 Rank 3 4 2 5 1 6 Expected Value 54 0.1 3 1 6 2 8 5 Play Off Tackle Option Toss Sweep Draw Pass Screen Defense 63 Wide Tackle Nickel Blitz 0.1 0.1 0.1 2 9 7 8 2 9 16 5 3 4 3 10 20 12 7 2 8 3 0.6 1 12 14 3 8 16 Expected Value 1.1 8.6 10.4 0.3 1.5 10 Rank 4 3 1 5 6 2 Order Demand 20 20 Cost Full Price Mark Down 3 5 3 Total Cost #REF! Total Full Price #NAME? Total Mark Down 0 Total Err:508 0.15 29 #REF! #REF! #REF! #REF! #REF! #REF! #REF! 0.1 #NAME? 30 #REF! #REF! #REF! #REF! #REF! #REF! #REF! EV w/ PI EV of PI Payoff Table #REF! O 25 r 26 27 d 28 e 29 r 30 s Max 0.1 25 #REF! #REF! #REF! #REF! #REF! #REF! #REF! 0.15 26 #REF! #REF! #REF! #REF! #REF! #REF! #REF! 0.3 Demand 27 #REF! #REF! #REF! #REF! #REF! #REF! #REF! 0.2 28 #REF! #REF! #REF! #REF! #REF! #REF! #REF! Expected Value Rank #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? Order Demand 20 22 Cost Full Price Discount Ill will 2 3 2.25 1 Total Cost #REF! Total Full PriceNAME? # Total Discount #REF! Total Ill Will 0 Total Err:508 0.2 28 #REF! #REF! #REF! #REF! #REF! #REF! #REF! 0.1 #NAME? 30 #REF! #REF! #REF! #REF! #REF! #REF! #REF! EV w/ PI EV of PI Payoff Table #REF! O 20 r 22 24 d 26 e 28 r 30 s Max 0.05 20 #REF! #REF! #REF! #REF! #REF! #REF! #REF! 0.1 22 #REF! #REF! #REF! #REF! #REF! #REF! #REF! 0.25 Demand 24 #REF! #REF! #REF! #REF! #REF! #REF! #REF! 0.3 26 #REF! #REF! #REF! #REF! #REF! #REF! #REF! Opportunity Loss EV w/ PI O 20 r 22 24 d 26 e 28 r 30 s 20 #REF! #REF! #REF! #REF! #REF! #REF! 22 #REF! #REF! #REF! #REF! #REF! #REF! Demand 24 #REF! #REF! #REF! #REF! #REF! #REF! 26 #REF! #REF! #REF! #REF! #REF! #REF! 28 #REF! #REF! #REF! #REF! #REF! #REF! 30 #REF! #REF! #REF! #REF! #REF! #REF! Expected Value Rank #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? EOL Rank #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? #NAME? Maximin O r d e r s Maximax O r d e r s Hurwicz O r d e r s Minimax Regret O r d e r s Regret 25 0 1 2 3 4 5 26 2 0 1 2 3 4 25 50 49 48 47 46 45 26 50 52 51 50 49 48 25 50 49 48 47 46 45 26 50 52 51 50 49 48 25 50 49 48 47 46 45 26 50 52 51 50 49 48 25 26 27 28 29 30 Demand 27 50 52 54 53 52 51 28 50 52 54 56 55 54 29 50 52 54 56 58 57 30 50 52 54 56 58 60 25 26 27 28 29 30 Demand 27 50 52 54 53 52 51 28 50 52 54 56 55 54 29 50 52 54 56 58 57 30 50 52 54 56 58 60 25 26 27 28 29 30 Demand 27 50 52 54 53 52 51 28 50 52 54 56 55 54 29 50 52 54 56 58 57 30 50 52 54 56 58 60 25 26 27 28 29 30 Demand 27 4 2 0 1 2 3 28 6 4 2 0 1 2 29 8 6 4 2 0 1 30 10 8 6 4 2 0 Max 50 49 48 47 46 45 Rank 1 2 3 4 5 6 Min 50 52 54 56 58 60 Rank 6 5 4 3 2 1 Max 0.4 50 52 54 56 58 60 1 Min 0.6 Expected Rank 50 50 49 50.2 48 50.4 47 50.6 46 50.8 45 51 6 5 4 3 2 1 Max 10 8 6 4 4 5 Rank 6 5 4 1 1 3 Generated using treeplan.xla - Open the file on the book CD (accept macros) - This Excel Add-in is useful but not testable 0.3 Event 3 0 Investment A 70000 23300 0.7 Event 4 75000 - Choose Investment A with an Expected value of $23,300. - The Expected Value for Investment B is $16,100 (Quiz Answer) 1 0.15 Event 9 0 29000 5000 66000 Decision 5 20000 66000 1 Decision 6 45000 25000 Decision 12 17000 29000 23300 1 Decision 13 60000 10000 Investment B 50000 16100 0.55 Event 10 0 5000 Decision 16 9000 3750 2 Decision 17 55000 0.3 Event 11 80000 30000 5000 0.4 Event 7 210000 300000 210000 0.6 Event 8 -30000 60000 -30000 -25000 5000 0.2 Event 14 133000 200000 133000 0.8 Event 15 3000 70000 3000 10000 0.35 Event 18 46000 105000 0.65 Event 19 -19000 40000 -19000 46000 5000 30000 ID Name Value 0 TreePlan 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Prob 0 0 0 0 Pred 0 0 0 0 0 0 Kind 0D 0E 0E 1D 1T 3E 3T 5T 5T 2D 2D 2T 9E 9T 12 T 12 T 10 E 10 T 16 T 16 T NS 2 2 3 2 0 2 0 0 0 2 2 0 2 0 0 0 2 0 0 0 S1 1 3 9 5 0 7 0 0 0 12 16 0 14 0 0 0 18 0 0 0 S2 2 4 10 6 0 8 0 0 0 13 17 0 15 0 0 0 19 0 0 0 S3 0 0 11 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 S4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 S5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Row 26 12 40 8 17 4 12 2 7 28 43 52 24 32 22 27 39 47 37 42 Col Mark 1 TRUE 5 TRUE 5 TRUE 9 TRUE 9 TRUE 13 TRUE 13 TRUE 17 TRUE 17 TRUE 9 TRUE 9 TRUE 9 TRUE 13 TRUE 13 TRUE 17 TRUE 17 TRUE 13 TRUE 13 TRUE 17 TRUE 17 TRUE Generated using treeplan.xla - Open the file on the book CD (accept macros) - This Excel Add-in is useful but not testable New Process 0 238 0.6 Win Contract 1 -110 238 Present Process 0 90 Bid -2 154 Subcontract 250 1 154 0.4 Lose Contract 30 28 138 Alternate Investment 30 30 - If we specify a payoff of $30m (cell H39) by making the Alternate Investment if we Bid and Lose the Contract, the Expected Value for Bidding is $154m (Quiz). - If we assume no payoff if we Bid but Lose the Contract, the Expected Value is $142m (book solution) - If we specify a payoff of $30m (cell H39) by making the Alternate Investment if we Bid and Lose the Contract, the Expected Value for Bidding is $154m (Quiz). - If we assume no payoff if we Bid but Lose the Contract, the Expected Value is $142m (book solution) 0.3 Great Success 488 600 488 0.6 Moderate Success 188 300 0.1 Failure -212 -100 -212 188 0.5 Great Success 188 300 188 0.3 Moderate Success 88 200 0.2 Failure -152 -40 -152 88 138 28 30 H39) by making the ose the Contract, the (Quiz). t Lose the Contract, olution) H39) by making the ose the Contract, the (Quiz). t Lose the Contract, olution) ID Name Value 0 TreePlan 1 2 3 4 5 6 7 8 9 10 11 12 13 Prob 0 0 0 0 Pred 0 0 0 Kind 0D 0E 0T 1D 1T 3E 3E 3T 6T 6T 6T 5T 5T 5T NS 2 2 0 3 0 3 3 0 0 0 0 0 0 0 S1 1 3 0 5 0 11 8 0 0 0 0 0 0 0 S2 2 4 0 6 0 12 9 0 0 0 0 0 0 0 S3 0 0 0 7 0 13 10 0 0 0 0 0 0 0 S4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 S5 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Row 35 28 42 19 37 7 22 32 17 22 27 2 7 12 Col Mark 1 TRUE 5 TRUE 5 TRUE 9 TRUE 9 TRUE 13 TRUE 13 TRUE 13 TRUE 17 TRUE 17 TRUE 17 TRUE 17 TRUE 17 TRUE 17 TRUE ...
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