Exam 20: Decision Making

Blossom's Flowers purchases roses for sale for Valentine's Day.The roses are purchased for $10 a Dozen and are sold for $20 a dozen.Any roses not sold on Valentine's Day can be sold for $5 per Dozen.The owner will purchase 1 of 3 amounts of roses for Valentine's Day: 100, 200, or 400 dozen Roses.Given 0.2, 0.4, and 0.4 are the probabilities for the sale of 100, 200, or 400 dozen roses, Respectively, then the optimal alternative using EMV for selling roses is to buy dozen Roses.

For a potential investment of $5,000, a portfolio has an EMV of $1,000 and a standard deviation of $100.The return to risk ratio is

SCENARIO 20-1 -Referring to Scenario 20-1, if the probability of S1 is 0.5, then the expected monetary value (EMV ) For A1 is

SCENARIO 20-5 -Referring to Scenario 20-5, what is the EOL for Action B?

A tabular presentation that shows the outcome for each decision alternative under the various states of Nature is called:

_________ is a procedure for revising probabilities based upon additional information.

SCENARIO 20-1 -Referring to Scenario 20-1, what is the best action using the maximin criterion?

SCENARIO 20-5 -Referring to Scenario 20-5, what is the opportunity loss for Action B with Event 3?

SCENARIO 20-5 -Referring to Scenario 20-5, what is the optimal action using EMV?

SCENARIO 20-2 -Referring to Scenario 20-2, the EMV for Action A is

SCENARIO 20-6 A student wanted to find out the optimal strategy to study for a Business Statistics exam.He constructed the following payoff table based on the mean amount of time he needed to study every week for the course and the degree of difficulty of the exam.From the information that he gathered from students who had taken the course, he concluded that there was a 40% probability that the exam would be easy. -Referring to Scenario 20-6, how many possible courses of action are there?

A medical doctor is involved in a $1 million malpractice suit.He can either settle out of court for $250,000 or go to court.If he goes to court and loses, he must pay $825,000 plus $175,000 in court Costs.If he wins in court the plaintiffs pay the court costs.Identify the actions of this decision-making Problem.

SCENARIO 20-6 A student wanted to find out the optimal strategy to study for a Business Statistics exam.He constructed the following payoff table based on the mean amount of time he needed to study every week for the course and the degree of difficulty of the exam.From the information that he gathered from students who had taken the course, he concluded that there was a 40% probability that the exam would be easy. -True or False: Referring to Scenario 20-6, the optimal strategy using the coefficient of variation criterion is to study 8 hours per week on average for the exam.

SCENARIO 20-5 -Referring to Scenario 20-5, what is the opportunity loss for Action A with Event 1?

SCENARIO 20-5 -Referring to Scenario 20-5, what is the optimal action using maximax criterion?

In a local cellular phone area, company A accounts for 60% of the cellular phone market, while Company B accounts for the remaining 40% of the market.Of the cellular calls made with company A, 1% of the calls will have some sort of interference, while 2% of the cellular calls with company B Will have interference.If a cellular call is selected at random, the probability that it will have Interference is

The risk- _______ curve represents the expected monetary value approach.

SCENARIO 20-6 A student wanted to find out the optimal strategy to study for a Business Statistics exam.He constructed the following payoff table based on the mean amount of time he needed to study every week for the course and the degree of difficulty of the exam.From the information that he gathered from students who had taken the course, he concluded that there was a 40% probability that the exam would be easy. -Referring to Scenario 20-6, what is the expected opportunity loss of spending 8 hours per week on average studying for the exam?

At Eastern University, 60% of the students are from suburban areas, 30% are from rural areas, and 10% are from urban areas.Of the students from the suburban areas, 60% are nonbusiness majors.Of The students from the rural areas, 70% are nonbusiness majors.Of the students from the urban areas, 90% are nonbusiness majors.If a randomly selected student is not a business major, the probability That the student is from the urban area is

SCENARIO 20-6 A student wanted to find out the optimal strategy to study for a Business Statistics exam.He constructed the following payoff table based on the mean amount of time he needed to study every week for the course and the degree of difficulty of the exam.From the information that he gathered from students who had taken the course, he concluded that there was a 40% probability that the exam would be easy. -True or False: Referring to Scenario 20-6, the optimal strategy using the maximax criterion is to study 8 hours per week on average for the exam.