TIE4203 (2020) tut-02-1 TIE4203 Decision Analysis in Industrial & Operations Management Tutorial #2 Question 1 P3.1Suppose you can choose either Deal Aor Deal B, and you get to keep whatever you might win. •Deal A: A coin is flipped. When it lands, if the side facing up is Heads, you win $1000, otherwise nothing. •Deal B: A die is rolled. If the side facing up is a One, you win $1000, otherwise nothing. (a)Which deal would you choose to own, Deal Aor Deal B? Why? (b)Suppose now the coin is flipped and the die is rolled. The results are a Tails and a One. Do you think you had made a good decision? Why or why not. (c)If you were given another opportunity to choose between Deal Aand Deal Bbefore flipping the coin and rolling the die again, which would you select? Question 2 P3.2 Jo has certainty equivalents for two deals as follows: Use the substitution rule to determine Jo’s certainty equivalent for the following deal: 0.75 0.25 $100 $0 $50 ~0.5 0.5 $100 $0 $35 ~0.375 0.25 $100 $0 $50$350.25 0.125
TIE4203 (2020) tut-02-2 Question 3 P3.3 John is rushing to the box office to buy ticket to see a new play.