Introduction to Decision Making in Organizations (MS&E153) Summer 2008 Homework Assignment #1: Due Wednesday, July 2 nd (4:00 PM in 300-300 in person OR by email to: [email protected]) Question 1 (15 pts.) Using concepts presented in class, identify a decision that is both organizationally and technically complex and explain why using specific examples. Question 2 (10 pts.) Assume you are the decision-maker facing the Plant Capacity Problem (presented in the first lecture). What is the maximum amount you should pay for an imperfect market test that correctly predicts demand with 25% probability (whether demand is high or low)? What is the most you should pay for a test that correctly predicts demand with probability 70%? Question 3 (15 pts.) Draw a decision quality diagram for a personal decision you recently made, such as your decision to take this course. Give reasons for your assessments on each dimension. Question 4 (20 pts.)
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