Decision_Analysis_Solutions

Decision_Analysis_Solutions - Decision Analysis Solutions...

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Decision Analysis Solutions 1. # of books to order # of sections offered 7 8 9 10 550 $5500 $5300 $5100 $4900 600 $5200 $6000 $5800 $5600 650 $4900 $5700 $6500 $6300 700 $4600 $5400 $6200 $7000 a. Maximax: Alternative Best Payoff 550 books $5500 (Max. of 5500, 5300, 5100, 4900) 600 $6000 (Max. of 5200, 6000, 5800, 5600) 650 $6500 (Max. of 4900, 5700, 6500, 6300) 700 $7000 * (Max. of 4600, 5400, 6200, 7000) Decision: Order 700 books; EV = $7000 b. Maximin: Alternative Worst Payoff 550 books $4900 (Min. of 5500, 5300, 5100, 4900) 600 $5200* (Min. of 5200, 6000, 5800, 5600) 650 $4900 (Min. of 4900, 5700, 6500, 6300) 700 $4600 (Min. of 4600, 5400, 6200, 7000) Decision: Order 600 books; EV = $5200 c. Laplace: Alternative Average Payoff 550 books $5200 (5500 + 5300 + 5100 + 4900)/4 600 $5650 (5200 + 6000 + 5800 + 5600)/4 650 $5850* (4900 + 5700 + 6500 + 6300)/4 700 $5800 (4600 + 5400 + 6200 + 7000)/4 Decision: Order 650 books; EV = $5850 2.
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This note was uploaded on 11/04/2011 for the course DS 412 taught by Professor Eng during the Fall '07 term at S.F. State.

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Decision_Analysis_Solutions - Decision Analysis Solutions...

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