BUSINESS ANALYTICS
METHODS OF DECISION ANALYSIS (QBUS2320)
ASSIGNMENT 1, 2016
Submit due date: 12 April 2016, 4 pm
Submission has to be done on Blackboard. You have only one attempt for submission.
Please upload a zipped folder containing ALL of your file

BUSINESS ANALYTICS
METHODS OF DECISION ANALYSIS (QBUS 2320)
Tutorial questions Bayes Theorem and Binomial Distribution
Q1 An insurance salesman meets with 8 prospective customers each
week. From historical data, the proportion of these customers who take

QBUS2320 Final Exam Preparation
Question 1:
Sally is an investor who faces the possibility of investing in two projects, A and B. Her utility
function is U ( x) 1 e
x
1000
, where x is measured in dollars and her current wealth is 200
dollars. The expecte

QBUS2320 Final Exam Preparation
Question 1:
Sally is an investor who faces the possibility of investing in two projects, A and B. Her utility
function is U ( x) 1 e
x
1000
, where x is measured in dollars and her current wealth is 200
dollars. The expecte

Week 9 - Topics
Monte Carlo Simulation
Modeling complex decisions
Using @Risk and Excel
QBUS 2320 Methods of Decision
Analysis, Semester 1 2016, W9
1
Monte Carlo Simulation
In previous work, we have been able to specify
probability distributions (discret

Week 11 - Topics
Utility Theory
Attitudes towards risk
Utility functions
Assessing utility functions
QBUS 2320 Methods of Decision
Analysis 2016, W11
1
Motivating Example Which
Game would you prefer?
18
50
QBUS 2320 Methods of Decision
Analysis 2016, W11

Week 10 - Topics
Monte Carlo Simulation
Modeling complex decisions
Evaluating continuous policies
EVPI & EVSI using simulation
QBUS 2320 Methods of Decision
Analysis, Semester 1 2016, W10
1
Cabin in the Woods
You have decided to leave the city and buy a

Week 6 - Topics
The Value of Information
Perfect Information: EVPI
Sample or Imperfect Information: EVSI/EVII
QBUS2320 Mehtods of Decision
Analysis, Semester 1 2016, W6
1
Information Collection - Key Strategy
Motivation
To reduce uncertainty which makes

Week 8 - Topics
The Negative Binomial Distribution
The Poisson Distribution
The Exponential Distribution
The Triangular Distribution
The Beta Distribution
1
QBUS 2320 Methods of Decision Analysis, Semester 1 2016, W8
Theoretical Probability Models
One so

BUSINESS ANALYTICS
METHODS OF DECISION ANALYSIS (QBUS 2320)
Tutorial questions Risk profiles
1. you are offered the possibility to invest in one of the following projects:
PROJECT A
NPV
Probability
1000
1
PROJECT B
NPV
1200
1500
Which project involves mor

BUSINESS ANALYTICS
METHODS OF DECISION ANALYSIS (QBUS2320)
Tutorial questions Value of information
A firm is considering the launch of a new product. There are 2
uncertainties concerning the new product:
Market share: Based on the current information the

BUSINESS ANALYTICS
METHODS OF DECISION ANALYSIS (QBUS 2320)
Tutorial Bayes Theorem and Binomial Distribution Solution
Q1
(a)
Using the binomial distribution with n=8 and p=0.18, the
probability of 3 or more is 0.161.
(b)
In 4 weeks the number of trials (i

BUSINESS ANALYTICS
METHODS OF DECISION ANALYSIS (QBUS2320)
Tutorial Week 11 Solution
Without any information, it is worthwhile pursuing the new product. The
EU under this policy is 79.243.
high
50.0%
high
0
TRUE
0
94.86832981
89.267
50.0%
0.25
83.67
83.66

BUSINESS ANALYTICS
METHODS OF DECISION ANALYSIS (QBUS2320)
Tutorial questions Utility Functions - solution
13.12. Answers will vary depending on students subjective judgments. Here
is an example.
a. Certainty Equivalents:
U(100) = 0
U(20,000) = 1
U(1000)

BUSINESS ANALYTICS
METHODS OF DECISION ANALYSIS (QBUS2320)
ASSIGNMENT 2, 2016
Submission due date: Tuesday 31 May 2016 @ 11:59 pm
Submission on Blackboard
Question 1
You are the CEO of a company which produces and sells luxury cars in Australia. You
have

BUSINESS SCHOOL
Unit of Study Outline
Unit Code QBUS2320
Unit Title Methods of Decision Analysis
Semester 1, 2016
Pre-requisite Units: BUSS1020 or ECMT1010 or equivalent
Co-requisite Units:
Prohibited Units: ECMT2730, ECMT2630, ENGG1850, CIVL3805
Assumed

BUSINESS ANALYTICS
METHODS OF DECISION ANALYSIS (QBUS 2320)
Tutorial Risk profiles - solution
1. The expected NPVs for projects A and B are 1000 and 1320,
respectively. It is clear that project A is risk-free, while project B
has a positive variance.
Even

APPENDIX TO MID-TERM
Total Probability formula:
P( A) P( A / B1 ) P( B1 ) P( A / B2 ) P( B2 ) . P( A / Bn ) P( Bn )
n
Where
P( B ) 1
i
i 1
Bayes Theorem:
P( A / B)
P( B / A) P( A)
P( B)
Binomial distribution:
P( X x / n, p)
n
n!
0
1
1|Page
1
1
2
2
n!
p

Considered jointly, obtaining information about both the delay and sales is worth $1,720. Likewise,
obtaining information about both sales and the ban is worth $52,780. The EVPI for all three is also
$52,780, indicating that, given information about both

BUSINESS ANALYTICS
METHODS OF DECISION ANALYSIS (QBUS 2320)
Midterm - 28 April 2015
Name:_
SID:_
No textbook or notes in any form (including electronic) are
allowed
You may use a calculator.
You should answer all 13 questions.
Please answer all the questi

BUSINESS ANALYTICS
METHODS OF DECISION ANALYSIS (QBUS 2320)
Midterm - 28 April 2015
Name:_
SID:_
No textbook or notes in any form (including electronic) are
allowed
You may use a calculator.
You should answer all 13 questions.
Please answer all the questi

DUMOND INTERNATIONAL PART I
So thats the simplied version of the decision tree
based on what appear to be the critical issues, Nancy
Milnor concluded. Calculating expected values, it
looks as though we should introduce the new product.
Now, I know that we

BUSINESS ANALYTICS
METHODS OF DECISION ANALYSIS (QBUS2320)
Tutorial questions Decision Trees
Problem 1 The game show
Mary has decided to participate in a general knowledge
game show. She will be asked a number of questions.
Each correct answer will award