Decision_Analysis_In-class

Decision_Analysis_In-class - is $1200/month with a...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Decision Analysis Problems Prof Uday 1. A hospital purchases blood every 21 days from a blood bank at $30/pint. Any blood not used must be discarded after 21 days. If the hospital runs out of blood during the 21-day period, it makes an emergency purchase of blood at a cost of $50/pint. Demand for blood over the 21-day period is as follows: Demand (pints) 100 125 150 175 200 Probability 0.1 0.2 0.3 0.3 0.1 a. Set up the decision table. b. Find the best decision. 2. Hitech Systems needs to open a branch office in Santa Rosa. Two suites are available, one satisfactory for their current needs, and a larger one capable of satisfying any increase in the demand for their services. The cost of the larger office
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: is $1200/month with a three-year lease. The smaller office is available at $800/month for three years, but its lease offers an option to move to a larger suite after one and a half years. The cost of the larger suite would then be $1400/month. Expected revenues are: Small office, current demand: $1000/month Small office, higher demand: $1100/month Large office, current demand: $1000/month Large office, higher demand: $1600/month The probability of having the current demand for the three years is estimated to be 0.3, while the probability of having the higher demand is 0.7. a. Construct a decision tree. b. Find the best decision(s)....
View Full Document

This note was uploaded on 09/09/2011 for the course DS 412 taught by Professor Eng during the Spring '07 term at S.F. State.

Ask a homework question - tutors are online