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Module/Week 7 Homework: Decision-Making Under Uncertainty BUSA 3315: You can draw your trees either by hand on paper or in Excel. You can submit your...
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Problem 1 <br/>The WHN Company is going to introduce one the three

products: widget, a hammer, and a nimnot. The market condition could be favorable, stable or unfavorable with the probabilities 0.2. 0.5. and 0.3 respectively. The monetary outcomes for each product under each condition are described in the following table:
Model a decision tree to identify which new product should be introduced in order to maximize the company's profit?


In designing a new space vehicle, NASA needs to decide whether to provide 0, 1, or 2 backup systems for a critical component of the vehicle. The first backup system, if included, comes into use only if the original system fails. The second backup system, if included, comes into use only if the original system and the first backup system both fail. NASA engineers claim that each system, independently of the others, has 1% chance of failing if called into use. Each backup system costs $70,000 to produce and install within the vehicle. Once the vehicle is in flight, the mission will be scrubbed only if all systems (the original and backups) fail. The cost of a scrubbed mission, in addition to production cost, is assessed to be $8,000,000.
Model a decision tree and identify the strategy that minimizes NASA's expected total cost.
I need as much detailed steps (screen shoots or attach a file) as possible, please.

Wk7 -decision making under certainty .jpg
Module/Week 7 Homework: Decision-Making Under Uncertainty
BUSA 3315: Spreadsheet Modeling with Business Applications
Please note: You can draw your trees either by hand on paper or in Excel. If you do it on a
paper, please take a picture of the tree and insert it in your solution file. You can submit
your solution as an Excel file or Word document. In either case, your solution should
calculations).
contain your decision trees and all necessary calculations ( not just the results of
Problem 1. The WHN Company
The WHEN Company is going to introduce one of the three new products: a widget, a humaner, or a cannot. The market
condition could be favorable, stable, or unfavorable with the probabilities 0.2, 05. and 0.3 respectively. The monetary
outcomes for each product under each condidon are described in the following table
Favorable
Stable
Unfavorable
Widget
$120,090
570,000 -$75.000
Hummer|$60.000
$40,000
$20,000
Nimnot |$35.000
$301000 |$30.090
Create a decision tree to identify which new product should be latrodaced in order to maximize the company's profit?
Problem 2. NASA
In designing a new space vehicle, NASA needs to decide whether to provide 0, 1, or 2
backup systems for a critical component of the vehicle. The first backup system, if included,
comes into use only if the original system fails. The second backup system, if included,
comes into use only if the original system and the first backup system both fail. NASA
engineers claim that each system, independently of the others, has 1% chance of failing if
called into use. Each backup system costs $70,000 to produce and install within the vehicle.
Once the vehicle is in flight, the mission will be scrubbed only if all systems (the original
and backups) fail. The cost of a scrubbed mission, in addition to production cost, is assessed
to be $8,000,000.
Create a decision tree and identify the strategy that minimizes NASA's expected total cost.

Step-by-step answer

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