MGT2251_Quiz12_111011 (1)

MGT2251_Quiz12_111011 (1) - Last Name First Name T-Square...

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Last Name, First Name: T-Square ID QUIZ # 12 FORM: B DATE: 11/10/2011 TODAY's QUESTIONs and Your Answers: 1 Draw the decision tree for the problem above. What decision maxmizes EMV? 2 2 points TIF (#102) 25000 High 0.5 50000 "draw the tree" = -1 "correct choice" = -1 20000 Site 1 -5000 Low 0.5 -10000 40000 High 0.5 80000 Site 2 25000 -15000 Low 0.5 -30000 Answer : Site 2 Maximizes EMV = 25000 Payoff Table with NO Survey Payoff Table with Positive Survey Payoff Table with Negative Survey SURVEY COST= 5000 States of Nature States of Nature States of Nature Alternatives High Low Alternatives High Low Alternatives High Low Site 1 50000 -10000 Site 1 45000 -15000 Site 1 45000 -15000 Site 2 80000 -30000 Site 2 75000 -35000 Site 2 75000 -35000 Probabilities 50% 50% Probabilities 80% 20% Probabilities 10.0% 90.0% 2 Redraw the decision tree using the survey information found in the tables above. What decision maxmizes EMV? 4
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This note was uploaded on 01/30/2012 for the course MGT 2251 taught by Professor Chang during the Fall '08 term at Georgia Tech.

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