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Decision Making: Carter Racing
Plan for today:ProposalNote about next classCarter Racing caseProblem solving process
Decision Makingunder UncertaintyCarter Racing:Will You Race Or Not?
Your DecisionShould they race?Form groups of 3Choose roles: John, Paul, or TomMake a decision
Your Group’s DecisionHow many groups decided to race? Not race?Did group decision match individual decision?For groups who decided not to race, Why?For groups who decided to race, Why?How did you arrive at your decision?Individually?In the group?
Let’s be honestYou can NEVERreduce risk to zeroI don’t just mean here, I mean in all situationsThat means the question is ALWAYS: Always, always, alwaysWhat tradeoffs are we making?
Let’s be honestWe need to make these decisions with our eyes openHow?Calculating expected values of decisions is one wayWhat tradeoffs are we making?
Racing RecordTotal Races Entered = 24Races Finished (15/24) = 62.5%12 in Top 5 (12/24) = 50%3 not in Top 5 (3/24) = 12.5%Races not Finished (9/24) = 37.5%7 with blown engine (7/24) = 29.2%2 for other reasons (2/24) = 8.3%
Outcome Summary (in millions)DecisionExpensesRevenuesValue of OutcomeRACEFinish in Money (Top five)0.015 entry1.04 Goodstone0.50 oil1.525