Exam 16: Decision Making and Payoff Tables in Investment Scenarios

Given the payoff table below, determine the expected value and size of warehouse that would be Built, given a probability of 0.7 and 0.3 to the high and low demands, respectively.

i. Each typical seasonal index is a percent with the average for the year equal to 100. ii. The ratio-to-moving-average method eliminates the seasonal, cyclical and irregular components From the original data (y). iii. The trend component of a time series is obtained my minimizing the sum of the squares of the Errors.

A logarithmic straight-line trend equation should be used for forecasts when the time series is Increasing by?

A plastics manufacturing performed a quarterly time series analysis for demands over the last five Years (periods 1 through 20). The analysis resulted in the following trend equation and seasonal Indexes: = 920.0 + 22.6 t If demand for period 19 was actually 1,000, what was the deseasonalized demand?

I You are trying to decide in which of the three companies you should invest. Refer to the following Payoff Table. If the market rises in the next year, which of the following statements are correct? i. The Opportunity Loss for Company A is $200. ii. The Opportunity Loss for Company B is $200. ii. The Opportunity Loss for Company C is $700.

i. Long-term forecasts are usually from one year to more than 10 years into the future. ii. A forecast is considered necessary in order to have the raw materials, production facilities, and Staff available to meet estimated future demands. iii. One component of a time series is the secular trend that is the smooth movement of a series Over a short period of time, such as a few months or quarters.

A linear trend equation is used to represent time series values when the dependent data are Changing by equal?

You are trying to decide in which of the three companies you should invest. Refer to the following Payoff Table. If the probability of the market declining in the next year is 0.5, which of the following statements Are correct? i. The Expected value of stock purchased under conditions of certainty is $1,675. ii. The Expected value of stock purchased under conditions of certainty is $2,200. iii. The Expected value of stock purchased under conditions of certainty is $1,150.

The following linear trend equation was developed for the annual sales of the Jordan Manufacturing Company. ŷ = 500 + 60t ($000). How much are sales increasing?

The alternative which offers the lowest EOL is the same as the one which

Listed below is the net sales in $ million for Home Depot Inc., and its subsidiaries from 1994 to 2003. Using the printout below, what are the estimated sales for 2005?

You are trying to decide in which of the three companies you should invest. Refer to the following Payoff Table. If the probability of the market declining in the next year is 0.5, which of the following statements Are correct? i. The Expected Opportunity Loss for Company A is $20. ii. The Expected Opportunity Loss for Company B is $75. iii. The Expected Opportunity Loss for Company C is $440.

If the data appears to be increasing exponentially and we wish to forecast number of passengers For year 9, we can use Log10 and linear regression equation. What is the linear equation for Log10 of This data? Log10:

For a time series beginning with 1988 and extending up to 2001, which year would be coded with a One when using the coded method?

Consider the following decision table in which w, x, y, and z are decision alternatives and A and B Are the two possible states of nature, with probabilities 0.40 and 0.60. The expected value for decision Y is ___________.

i. The ratio-to-moving average method removes the time series trend component, resulting in 12 Numbers that are called specific seasonals. ii. For a quarterly time series, the initial step, using the ratio-to-moving average method, is to Remove the seasonal components from the time series using a 3-month centered moving average. iii. In the ratio-to-moving-average procedure, using the median or modified mean eliminates trend.

Given the trend equation ŷ = 25 + 0.6t (t = 0 in 2010), what would be the forecast value for 2014?

You have a decision to invest $10,000 in any of four different companies. You estimate the Probabilities that the economy will be favorable or unfavorable and you estimate the percent Returns over the next year. Based on expected opportunity loss, which company do you choose?

i. A time series is a collection of data recorded over a period of time, usually monthly, quarterly, or Yearly. ii. Long-term forecasts are usually from one year to more than 10 years into the future. iii. A forecast is considered necessary in order to have the raw materials, production facilities, and Staff available to meet estimated future demands.

Given the payoff table below, determine the profit and size of warehouse that would be built, using The maximax criterion.