EMGT 269 Elements of Problem Solving and Decision Making
EXTRA PROBLEM 2:
CONSTRUCTING DECISION TREES
& INFLUENCE DIAGAMS
The Executives of the general products company (GPC) have to decide which of
three products to introduce, A, B, or C. Product C is es

Solutions 5.1. Sensitivity analysis answers the question "What matters in this decision?" Or, "How do the results change if one or more inputs change?" To ask it still another way, "How much do the inputs have to change before the decision changes?" We ha

Solutions 3.1. Fundamental objectives are the essential reasons we care about a decision, whereas means objectives are things we care about because they help us achieve the fundamental objectives. In the automotive safety example, maximizing seat-belt use

Solutions 2.1. a. Some objectives might be to minimize cost, maximize safety, maximize comfort, maximize reliability, maximize cargo capacity (for shopping), maximize maneuverability (in city traffic). Students will undoubtedly come up with others as well

Solutions
1.1. Answers will be based on personal experience. It is important here to be sure the distinction is made
between good decisions on one hand (or a good decision-making process) and lucky outcomes on the other.
1.2. We will have models to repres

EMSE 269 - Elements of Problem Solving and Decision Making
EXTRA PROBLEM 10: THEORETICAL PROBABILITY MODELS
In bottle production, bubbles that appear in the glass are considered defects. Any
bottle that has more than two bubbles is classified as "nonconfo

EMGT 269 - Elements of Problem Solving and Decision Making
SOLUTION EXTRA PROBLEM 9: EXPERT JUDGMENT
A manufacturer needs to make an assessment of the size of the potential market
for a new product. A market analyst provides the following evaluations for

EMSE 269 - Elements of Problem Solving and Decision Making
EXTRA PROBLEM 8 - VALUE OF PERFECT INFORMATION
Mister Smith is trying to decide between investing $10,000 windfall into a savings
account at a 10% yearly interest rate or a new stock. The return o

EMSE 269 - Elements of Problem Solving and Decision Making
EXTRA PROBLEM 6: SOLVING DECISION TREES Read the following decision problem and answer the questions below. A manufacturer produces items that have a probability p of being defective. These items

EMSE 269 - Elements of Problem Solving and Decision Making
EXTRA PROBLEM 5: DOMINANCE AND RISK PROFILES (2) A. Can we make a decision in the decision problem depicted in Figure 1 using ONLY deterministic dominance considerations? Explain why or why not?
P

EMSE 269 Elements of Problem Solving and Decision Making
EXTRA PROBLEM 4:
SCREENING FOR COLORECTAL CANCER
The fecal occult blood test, widely used both in physicians offices and at home to
screen patients for colon and rectal cancer, examines a patients s

EMGT 269 Elements of Problem Solving and Decision Making
EXTRA PROBLEM 1: MONTHLY LOAN PAYMENT
Suppose you are planning to buy a new car. The car costs $25000, you have been approved for financing the loan with a 5 year term through the car dealer and the

EMGT 269 Elements of Problem Solving and Decision Making
EXTRA PROBLEM 3: PROBABILITY CALCULUS
P( A) = 0.68 , P ( B | A) = 0.30 , P( B | A) = 0.02
1. Find P( A) , P ( A B) , P ( A B)
P( A) = 1 - P( A) = 1 - 0.68 = 0.32
P( A B ) = P( B | A) P( A) = 0.30 *

EMGT 269 Elements of Problem Solving and Decision Making
EXTRA PROBLEM 7: SENSITIVITY ANALYSIS
Accept $2 Billion Max Result 2
Texaco Accepts $5 Billion (0.17)
5
High (p) Counteroffer $5 Billion Texaco Refuses (0.50) Counteroffer Final Court Decision Mediu