WEEK 1
Decision Making Under Uncertainty and Risk:
PRACTICE 1:
The company Mutual Benefits has $500,000 available for one of three investments alternatives in the stock
market:
i. a blue-chip stock offering;
ii. a growth-stock offering;
iii. a new venture

Solve by Linear Programming.
(Be sure to show the graph of the feasible region, the appropriate vertices, and optimal value.)
Exercise 1
LP 1. Maximize:
C=xy
Constraints:
x 0, and y 0
x + 3y 120
3x + y 120
Exercise 2
LP 2. Maximize:
C = 3x + 4y
Constraint

INTRODUCTION TO MANAGEMENT SCIENCE (M.S.)/OPERATION RESEARCH (OR)
Management problems are often complex and require a high level of managerial experience, insight, and
vision. These qualities become more necessary when managers attempt to make STRATEGIC
M

Using the Five criteria applicable for DMUU that evaluate the given alternatives:
1.
2.
3.
4.
MAXIMAX: a3 offer is preferable alternative at $500,000
MAXIMIN: a1 offer is preferable alternative at -$300,000
MINIMAX: a2 offer is preferable alternative at $

1.
To begin DRAWING your Network (Sample):
Draw a POINT on the left of your paper: Look at 2nd Column (Preconditions)
How many DASHES do you see? There is only 1. next to A
Draw 1-line segment connected form the point. Label it A.
In the second column

NETWORK: PERT 1 Practice
Consider the following table:
ACTIVITY PREC. ACT.
TIME ESTIMATES
to
A
B
C
D
E
F
G
-A
B
C
D, E, F
2
2
2
3
2
2
1
(days)
tml
tp
3
4
4
4
5
4
2
4
6
6
5
8
6
3
te
3
4
4
4
5
4
2
(4-2)/6 = 1/3
(6-2)/6 = 2/

NOTES: PERT
Networks
DISCLAIMER:
There are two sets of PDF files attached along with this weeks notes. It is
imperative that you read the textbook pages provided in those files. In order to
facilitate your online experience a short version of those notes

Extra Practice (Review Test 1)
Alternatives
E1: Inflation
E2: Recession
E3: Depression
A1: Portfolio A
100
50
-60
A2: Portfolio B
50
45
40
A3: Portfolio C
70
40
-10
.70
.20
.10
Probabilities
1. Using the 5 criteria for DMUU, evaluate each alternative and

To begin DRAWING your Network (for PERT 1):
Draw a POINT on the left of your paper: Look at 2nd Column - How many
DASHES do you see? There are 3 . next to A, B and C
Draw 3 line segments connected form the point. Label them A, B C.
A
B
D
E
G
!
!
!
!
!
In

LEHMAN COLLEGE
Department of Economics and Business
BBA 405 Spring 2016
Management Decision Making
Pre-Requisite: ECO 302/BBA 303
Phone: 718.960.8598
Robert Rodrguez
robert.rodriguez2@lehman.cuny.edu
Office: Carman 372
Hours: Tues. 5:15 6:00 PM
Course Des

7 '53; Linear Programming:
. Pedant variables. In other words, the. scale a; the
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Quick Reference - DMUU:
i. MAXIMAX: (best of best) Perfect Optimism
Look at rows. Pick best of each row. Pick the BEST of those choices
ii. MAXIMIN: (best of worst) Perfect Pessimism
Look at rows. Pick worst of each row. Look at all those choices. Pick th

OPEN ME FIRST!
Hello:
Welcome to BBA 405 ONLINE. My name is Robert Rodrguez and (hopefully) I will be facilitating you
online experience with Decision Making. This file will give you a simple outline of what is to come for the
next few weeks.
This weeks d

WEEK 2
Decision Making Under Risk:
PRACTICE 3:
Hudson Realty is considering a boost in advertising in order to reduce a large inventory of unsold houses. The
management plans to make its media decision using the following data on the expected success of n

Week 1 / Exercise 1
1) Maximax Criterion:
Look at rows. Pick best of each row. Pick the BEST of those choice
Alternatives/Events
a1: Blue Chip
a2: Growth
a3: Venture
e1: Boom
e2: Moderate Growth
e3: Moderate Decli

The following distributions are all normal.
Use the areas under the normal curve to find the appropriate areas.
over, please
Use the areas under the normal curve to find the appropriate areas.
1. Find the percent of total area under the normal curve betw

1.
To begin DRAWING your Network (Sample):
Draw a POINT on the left of your paper: Look at 2nd Column (Preconditions)
How many DASHES do you see? There is only 1. next to A
Draw 1-line segment connected form the point. Label it A.
In the second column

NETWORK: PERT 1 (Unit 2)
Consider the following table:
ACTIVITY PREC. ACT.
A
B
C
D
E
F
G
-A
B
C
D, E, F
TIME ESTIMATES
to
2
2
2
3
2
2
1
tml
3
4
4
4
5
4
2
(days)
tp
te
4
6
6
5
8
6
3
1) Construct a PERT network.
[NOTE: This is the most crucial part of the e

1.
Five criteria to make a decision
a) Maximax: Highest payoff in this investments is $500,000, which is a3.
Alternatives / Events
a1: Blue Chip
a2:
Growth
a3:
Venture
Alternatives / Events
a1: Blue Chip
a2:
Growth
a3:
Venture
e1: Boom
e2: Moderate Growth

Let
x = number of product I units
y = number of product II units.
Maximize z = 1.5x + 2y
subject to
x + y <= 1200 (constraint 1)
x <= 600 + 3y (constraint 2)
y <= 0.5x (constraint 3)
Vertexpointsare(1050,150),(800,400),(600,0)and(0,0).
Vertex
Lines
vertex

Managerial Decision-Making Environments:
Very few managerial decisions are made with certainty, that is, when a future
state of nature (say, the economy will continue to be in recession in the next month) is
known with 100% likelihood. More often, manage

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C A S E S T U D Y :I C M C o t p o t a l i o n
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WEEK 12 NOTES: Linear Programming
Organizations must make decisions about how to allocate their limited
resources. There is no organization that operates with unlimited resources.
Linear programming is a mathematical technique for finding the best use of

DMUU
Managerial Decision-Making Environments:
Very few managerial decisions are made with certainty, that is, when a future
state of nature (say, the economy will continue to be in recession in the next month) is
known with 100% likelihood. More often,