Extra Problem 5- Dominance and Risk Profiles - Solution Key

# Extra Problem 5- Dominance and Risk Profiles - Solution Key...

This preview shows pages 1–4. Sign up to view the full content.

EMSE 269 - Elements of Problem Solving and Decision Making Instructor: Dr. J. R. van Dorp 1 EXTRA PROBLEM 5: DOMINANCE AND RISK PROFILES (2) A. Can we make a decision in the decision problem depicted in Figure 1 using deterministic dominance considerations? Explain why or why not? ONLY PROFIT PROFIT 9 3 2 1 (0.30) (0.30) (0.70) (0.50) (0.50) (0.50) A B FIGURE 1

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
EMSE 269 - Elements of Problem Solving and Decision Making Instructor: Dr. J. R. van Dorp 2 YES, THE WORST OUTCOME OF OPTION A EQUALS 3, THE BEST OUTCOME OF OPTION B, EQUALS 2, WHICH IS WORSE THAN THE PREVIOUS BEST OF OPTION A. HENCE, OPTION A DETERMINISTICALL DOMINATES OPTION B AND IS PREFERRED. (5) B. How many cumulative risk profiles can be drawn for the tree in Figure 2 and give an explanation (DO NOT DRAW THE CUMULATIVE RISK PROFILES). ALTERNATIVE SYSTEM A : 1 STRATEGY ( ) DARK BLUE COLOR ALTERNATIVE SYSTEM B: 2 STRATEGIES ( AND COLOR) RED GREEN ALTERNATIVE SYSTEM C: 2 STRATEGIES ( AND COLOR) MAGENTA CYAN TOTAL : 5 SRATEGIES
EMSE 269 - Elements of Problem Solving and Decision Making Instructor: Dr. J. R. van Dorp

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

## This note was uploaded on 12/04/2011 for the course BUSINESS 500 taught by Professor John during the Spring '11 term at Kansas.

### Page1 / 7

Extra Problem 5- Dominance and Risk Profiles - Solution Key...

This preview shows document pages 1 - 4. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online