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The options from which a decision maker chooses a course of action are A) called the decision alternatives. B) under the control of the decision...

This question was answered on Aug 23, 2010. View the Answer
I need help with these Decision trees, linear programming, utility, feasibility problems, some are multiple choice and some are charts and graphs, I'm having problems with them, will you help me?
1. The options from which a decision maker chooses a course of action are A) called the decision alternatives. B) under the control of the decision maker. C) not the same as the states of nature. D) All of the alternatives are true. 2. A payoff A) is always measured in profit. B) is always measured in cost. C) exists for each pair of decision alternative and state of nature. D) exists for each state of nature. 3. Making a good decision A) requires probabilities for all states of nature. B) requires a clear understanding of decision alternatives, states of nature, and payoffs. C) implies that a desirable outcome will occur. D) All of the alternatives are true. 4. A decision tree A) presents all decision alternatives first and follows them with all states of nature B) presents all states of nature first and follows them with all decision alternatives. C) alternates the decision alternatives and states of nature. D) arranges decision alternatives and states of nature in their natural chronological order. 5. Which of the methods for decision making without probabilities best protects the decision maker from undesirable results? A) the optimistic approach B) the conservative approach C) minimum regret D) minimax regret 6. When consequences are measured on a scale that reflects a decision maker's attitude toward profit, loss, and risk, payoffs are replaced by A) utility. B) multicriteria measures. C) sample information D) opportunity loss.
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7. A decision maker has chosen .4 as the probability for which he cannot choose between a certain loss of 10,000 and the lottery p(-25000) + (1-p)(5000). If the utility of -25,000 is 0 and of 5000 is 1, then the utility of -10,000 is A) .5 B) .6 C) .4 D) 4 8. Lakewood Fashions must decide how many lots of assorted ski wear to order for its three stores. Information on pricing, sales, and inventory costs has led to the following payoff table, in thousands. Demand Order Size Low Medium High 1 lot 12 15 15 2 lots 9 25 35 3 lots 6 35 60 a. What decision should be made by the optimist? b. What decision should be made by the conservative? c. What decision should be made using minimax regret? 9. A payoff table is given as State of Nature Decision s 1 s 2 s 3 d 1 10 8 6 d 2 14 15 2 d 3 7 8 9 a. What decision should be made by the optimistic decision maker? b. What decision should be made by the conservative decision maker? c. What decision should be made under minimax regret? d. If the probabilities of s 1 , s 2 , and s 3 are .2, .4, and .4, respectively, then what decision should be made under expected value? e. What is the EVPI? 10. For the payoff table below, the decision maker will use P(s 1 ) = .15, P(s 2 ) = .5, and P(s 3 ) = .35. State of Nature Decision s 1 s 2 s 3 d 1 -5,000 1,000 10,000 d 2 -15,000 -2,000 40,000
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Answer 9,27,30.doc

Answer 9
From 3 states of natures we have the highest payoff as
s1=14;
s2=15 and
s3=9
Assuming all three states are equally likely
EVPI= (14+15+9)/3=38/3=12.889 Answer 27)
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This question was asked on Aug 21, 2010 and answered on Aug 23, 2010.

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