EMGT 501 HW #5 15.3-11 Due Day: Oct. 12.

Slides:

Advertisements

Similar presentations

Classification. Introduction A discriminant is a function that separates the examples of different classes. For example – IF (income > Q1 and saving >Q2)

Advertisements

Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved

Decision Making Under Risk Continued: Bayes’Theorem and Posterior Probabilities MGS Chapter 8 Slides 8c.

Decision Theory.

20- 1 Chapter Twenty McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved.

1 1 Slide © 2004 Thomson/South-Western Payoff Tables n The consequence resulting from a specific combination of a decision alternative and a state of nature.

Decision Theory.

Chapter Topics The Payoff Table and Decision Trees Opportunity Loss

Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Chapter Twenty An Introduction to Decision Making GOALS.

Managerial Decision Modeling with Spreadsheets

1 1 Slide © 2000 South-Western College Publishing/ITP Slides Prepared by JOHN LOUCKS.

©The McGraw-Hill Companies, Inc. 2008McGraw-Hill/Irwin An Introduction to Decision Making Chapter 20.

1 1 Slide © 2008 Thomson South-Western. All Rights Reserved Slides by JOHN LOUCKS St. Edward’s University.

1 1 Slide © 2008 Thomson South-Western. All Rights Reserved © 2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or.

Decision Analysis Chapter 15: Hillier and Lieberman Dr. Hurley’s AGB 328 Course.

Chapter 7 Decision Analysis

Slides prepared by JOHN LOUCKS St. Edward’s University.

Chapter 4 Decision Analysis.

1 1 Slide Decision Analysis n Structuring the Decision Problem n Decision Making Without Probabilities n Decision Making with Probabilities n Expected.

Decision Analysis A method for determining optimal strategies when faced with several decision alternatives and an uncertain pattern of future events.

Chapter 8 Decision Analysis MT 235.

1 1 Slide Decision Analysis Professor Ahmadi. 2 2 Slide Decision Analysis Chapter Outline n Structuring the Decision Problem n Decision Making Without.

1 1 Slide © 2009 South-Western, a part of Cengage Learning Slides by John Loucks St. Edward’s University.

Topic 2. DECISION-MAKING TOOLS

Decision Analysis And Decision Tree Software. Decision Analysis Managers often must make decisions in environments that are fraught with uncertainty.

Business 260: Managerial Decision Analysis

BA 555 Practical Business Analysis

Decision Analysis Chapter 3

Decision analysis: part 1 BSAD 30 Dave Novak Source: Anderson et al., 2013 Quantitative Methods for Business 12 th edition – some slides are directly from.

Decision Tree Analysis. Decision Analysis Managers often must make decisions in environments that are fraught with uncertainty. Some Examples –A manufacturer.

Practice Problem Chapter 5 (Decision Trees)

BA 452 Lesson C.4 The Value of Information ReadingsReadings Chapter 13 Decision Analysis.

© 2008 Prentice Hall, Inc.A – 1 Operations Management Module A – Decision-Making Tools PowerPoint presentation to accompany Heizer/Render Principles of.

Decision Analysis. Decision Analysis provides a framework and methodology for rational decision making when the outcomes are uncertain.

1 1 Slide © 2009 Thomson South-Western. All Rights Reserved Slides by JOHN LOUCKS St. Edward’s University.

Operational Decision-Making Tools: Decision Analysis

Decision Making Under Uncertainty Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing.

Final Exam Due: December 14 (Noon), 2004

1 Revising Judgments in the Light of New Information.

1 1 Slide © 2005 Thomson/South-Western EMGT 501 HW Solutions Chapter 12 - SELF TEST 9 Chapter 12 - SELF TEST 18.

© 2006 Prentice Hall, Inc.A – 1 Operations Management Module A – Decision-Making Tools © 2006 Prentice Hall, Inc. PowerPoint presentation to accompany.

MA - 1© 2014 Pearson Education, Inc. Decision-Making Tools PowerPoint presentation to accompany Heizer and Render Operations Management, Eleventh Edition.

Chapter 8 Decision Analysis n Problem Formulation n Decision Making without Probabilities n Decision Making with Probabilities n Risk Analysis and Sensitivity.

Lecture No. 41 Chapter 12 Contemporary Engineering Economics Copyright © 2010 Contemporary Engineering Economics, 5th edition, © 2010.

An Introduction to Decision Theory (web only)

An Introduction to Decision Theory

©2003 Thomson/South-Western 1 Chapter 19 – Decision Making Under Uncertainty Slides prepared by Jeff Heyl, Lincoln University ©2003 South-Western/Thomson.

Decision Trees Updated 2 December 2005

1 1 Slide Decision Theory Professor Ahmadi. 2 2 Slide Learning Objectives n Structuring the decision problem and decision trees n Types of decision making.

Decision Making Under Uncertainty and Risk 1 By Isuru Manawadu B.Sc in Accounting Sp. (USJP), ACA, AFM

Chapter 9 - Decision Analysis - Part I

Decision Analysis Mary Whiteside. Decision Analysis Definitions Actions – alternative choices for a course of action Actions – alternative choices for.

A - 1© 2011 Pearson Education, Inc. publishing as Prentice Hall A A Decision-Making Tools PowerPoint presentation to accompany Heizer and Render Operations.

Models for Strategic Marketing Decision Making. Market Entry Decisions To enter first or to wait Sources of First-Mover Advantages –Technological leadership.

Decision Trees. Introduction Decision trees enable one to look at decisions: with many alternatives and states of nature which must be made in sequence.

Fundamentals of Decision Theory Chapter 16 Mausam (Based on slides of someone from NPS, Maria Fasli)

QUANTITATIVE TECHNIQUES

1 1 © 2003 Thomson  /South-Western Slide Slides Prepared by JOHN S. LOUCKS St. Edward’s University.

© 2015 McGraw-Hill Education. All rights reserved. Chapter 16 Decision Analysis.

Decision Analysis Pertemuan Matakuliah: A Strategi Investasi IT Tahun: 2009.

Chapter 8 Decision Analysis n Problem Formulation n Decision Making without Probabilities n Decision Making with Probabilities n Risk Analysis and Sensitivity.

1 1 Slide © 2005 Thomson/South-Western Chapter 13 Decision Analysis n Problem Formulation n Decision Making without Probabilities n Decision Making with.

Dr. Michael R. Hyman Use of Bayesian Decision Analysis to Assess if Conducting Marketing Research is Worthwhile.

Chapter Twenty McGraw-Hill/Irwin

Operations Management

John Loucks St. Edward’s University . SLIDES . BY.

Chapter 23 Decision Analysis.

Decision Theory.

DRQ #5 – September 24, 2009 Aquarius Products, Inc, has just completed development of a new line of skin-care products. Preliminary market research indicates.

Game Theory II Solutions 1

Presentation transcript:

EMGT 501 HW #5 15.3-11 Due Day: Oct. 12

15.3-11 Management of the Telemore Company is considering developing and marketing a new product. It is estimated to be twice as likely that the product would prove to be successful as unsuccessful. It is were successful, the expected profit would be $1,500,000. If unsuccessful, the expected loss would be $1,800,000. A marketing survey can be conducted at a cost of $300,000 to predict whether the product would be successful. Past experience with such surveys indicates that successful products have been predicted to be successful 80 percent of the time, whereas unsuccessful products have been predicted to be unsuccessful 70 percent of the time.

(a) Develop a decision analysis formulation of this problem by identifying the alternative actions, the states of nature, and the payoff table when the market survey is not conducted. (b) Assuming the market survey is not conducted, use Bayes’ decision rule to determine which decision alternative should be chosen. (c) Find EVPI. Does this answer indicate that consideration should be given to conducting the market survey?

(d) Assume now that the market survey is conducted (d) Assume now that the market survey is conducted. Find the posterior probabilities of the respective states of nature for each of the two possible predictions from the market survey. (e) Find the optimal policy regarding whether to conduct the market survey and whether to develop and market the new product.

15.3-11 a) b) They should choose to develop the new product because $400,000.

15.3-11 c) This is larger than $300,000, so that consideration should be given to conducting the market survey.

15.3-11 d) P(S)=2/3 P(US)=1/3 P(+/ S)=0.8 P(-/ S)=0.2 P(-/ US)=0.7 P(+/ US)=0.3 842 . 33 3 66 8 ) ( / = ´ + US P S

15.3-11

15.3-11 e) E(S/+) = 0.842 (1500K)+0.158(-1800K)=$979K E(US/+)=0 P(+) = 0.633, P(-) = 0.367 Expected Payoff = 0.633($979K)+0.367(0)=$620K EVE=$620K - $400K=$220K Cost=$300K > $220K Optimal Strategy: Do not conduct survey and market product.