MIT15_053S13_rec10sol

MIT15_053S13_rec10sol - Optimization Methods in Management...

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Optimization Methods in Management Science MIT 15.053, Spring 2013 Recitation 10, Friday May 3th, 2013 Problem 1 The Airfare Problem 1 . You are trying to get the cheapest airfare that you can. just called up and found that the ticket home will cost $400, and it cannot be refunded or exchanged. can also buy a ticket for $450, which can be refunded for $430 (and thus costs you $20). The price of tickets will change in one week, and you will have one more chance to buy a ticket. There is a 50% chance that the ticket would cost $300, and a 50% chance that it would cost $600. What should you do to minimize the expected expense? Write the Airfare problem as a decision tree, and solve it. Solution. The decision tree is:
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Value of Information Suppose Tom is at a carnival and while there he sees a green monkey stuffed animal that he would like to have. In order to win the stuffed monkey needs to play a game that costs $1. In the game there are 5 shells and a ball that is hidden behind one of the shells. In order to win the monkey, needs to pick the shell that the ball is under. The monkey overall is worth $3. Assume in all parts of this problem the probability the ball is behind a give shell is .2 (i.e. 1 / # of shells) Part 2.A Determine using a decision tree if it is in Toms best
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MIT15_053S13_rec10sol - Optimization Methods in Management...

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