Question 1

Prior probabilities are the probabilities of the states of nature

Accepted Answer

A) after obtaining sample information 
B) prior to obtaining of perfect information 
C) prior to obtaining sample information 
D) after obtaining perfect information 
A) after obtaining sample information 
B) prior to obtaining of perfect information 
C) prior to obtaining sample information 
D) after obtaining perfect information

Question 2

Exhibit 21-1
Below you are given a payoff table involving two states of nature and three decision alternatives.   The probability of occurrence of SS1U1B11S1U1B0 = 0.2.
-Refer to Exhibit 21-1. The expected value of perfect information is

Accepted Answer

A) 6.2 
B) 2.0 
C) 13.6 
D) 4.8 
A) 6.2 
B) 2.0 
C) 13.6 
D) 4.8

Question 3

Exhibit 21-1
Below you are given a payoff table involving two states of nature and three decision alternatives.   The probability of occurrence of SS1U1B11S1U1B0 = 0.2.
-Refer to Exhibit 21-1. The expected monetary value of alternative A is

Accepted Answer

A) 7.4 
B) 11.6 
C) 8.8 
D) 13 
A) 7.4 
B) 11.6 
C) 8.8 
D) 13

Question 4

A tabular presentation of the expected gain from the various options open to a decision maker is called

Accepted Answer

A) a payoff table 
B) a decision tree 
C) the expected opportunity loss 
D) the expected value of perfect information 
A) a payoff table 
B) a decision tree 
C) the expected opportunity loss 
D) the expected value of perfect information

Question 5

A fashion designer wants to produce a new line of clothes. In the production of the clothes, expensive, medium-priced, or inexpensive materials can be used. The profits associated with each type of material depend upon economic conditions next year. Below you are given the payoff table.   An economist believes that the probability that the economy will improve is 20%, the probability that the economy will stay the same is 70%, and the probability that the economy will get worse is 10%. 
a.Compute the expected monetary value for each decision. Which decision is the best?
b.Compute the expected value of perfect information.

Accepted Answer

a.45,000,

Prior probabilities are the probabilities of the states of nature

Exhibit 21-1 Below you are given a payoff table involving two states of nature and three decision alternatives. The probability of occurrence of S₁ = 0.2. -Refer to Exhibit 21-1. The expected value of perfect information is

Exhibit 21-1 Below you are given a payoff table involving two states of nature and three decision alternatives. The probability of occurrence of S₁ = 0.2. -Refer to Exhibit 21-1. The expected monetary value of alternative A is

A tabular presentation of the expected gain from the various options open to a decision maker is called

Data and Statistics

Descriptive Statistics: Tabular and Graphical Displays

Descriptive Statistics: Numerical Measures

Introduction to Probability

Discrete Probability Distributions

Continuous Probability Distributions

Sampling and Sampling Distributions

Interval Estimation

Hypothesis Tests

Inference About Means and Proportions With Two Populations

Inferences About Population Variances

Comparing Multiple Proportions, Test of Independence and Goodness of Fit

Experimental Design and Analysis of Variance

Simple Linear Regression

Multiple Regression

Regression Analysis: Model Building

Time Series Analysis and Forecasting

Nonparametric Methods

Statistical Methods for Quality Control

Index Numbers

Sample Survey on Website

Filters

Exam 21: Decision Analysis on Website

Prior probabilities are the probabilities of the states of nature

Exhibit 21-1 Below you are given a payoff table involving two states of nature and three decision alternatives. The probability of occurrence of S1 = 0.2. -Refer to Exhibit 21-1. The expected value of perfect information is

Exhibit 21-1 Below you are given a payoff table involving two states of nature and three decision alternatives. The probability of occurrence of S1 = 0.2. -Refer to Exhibit 21-1. The expected monetary value of alternative A is

A tabular presentation of the expected gain from the various options open to a decision maker is called

Data and Statistics

Descriptive Statistics: Tabular and Graphical Displays

Descriptive Statistics: Numerical Measures

Introduction to Probability

Discrete Probability Distributions

Continuous Probability Distributions

Sampling and Sampling Distributions

Interval Estimation

Hypothesis Tests

Inference About Means and Proportions With Two Populations

Inferences About Population Variances

Comparing Multiple Proportions, Test of Independence and Goodness of Fit

Experimental Design and Analysis of Variance

Simple Linear Regression

Multiple Regression

Regression Analysis: Model Building

Time Series Analysis and Forecasting

Nonparametric Methods

Statistical Methods for Quality Control

Index Numbers

Sample Survey on Website

Filters

Exhibit 21-1 Below you are given a payoff table involving two states of nature and three decision alternatives. The probability of occurrence of S₁ = 0.2. -Refer to Exhibit 21-1. The expected value of perfect information is

Exhibit 21-1 Below you are given a payoff table involving two states of nature and three decision alternatives. The probability of occurrence of S₁ = 0.2. -Refer to Exhibit 21-1. The expected monetary value of alternative A is