Demolition Company The payoff table and the prior probabilities for three states of nature for a demolition company are shown below: Prior Probabilities: P(sS1U1B11S1U1B0)= 0.4,P(sS1U1B12S1U1B0)= 0.5,and P(sS1U1B13S1U1B0)= 0.1. -{Demolition Company Narrative} Determine the EMV decision.

EMV (a 1 )= (0.4)(80)+ (0.5)(60)+

Gas Company A payoff table for an electric company is shown below: The following prior probabilities are assigned to the states of nature: P(sS1U1B11S1U1B0)= 0.3,P(sS1U1B12S1U1B0)= 0.7. -{Gas Company Narrative} Calculate the expected opportunity loss for each act with present information.What decision should be made using the EOL criterion?

EOL (a 1 )= (0.3)(0)+ (0.7)(3)= 2.1 EOL (a 2 )

Sporting Goods Store A payoff table for a clothing store is shown below. The following prior probabilities are assigned to the states of nature: P(sS1U1B11S1U1B0)= 0.2,P(sS1U1B12S1U1B0)= 0.6,and P(sS1U1B13S1U1B0)= 0.2. -{Sporting Goods Store Narrative} Determine the EOL decision.

EOL (a 1 )= (0.2)(0)+ (0.6)(0)+ (

Exam 22: Decision Analysis

An opportunity loss is the difference between what the decision maker's profit for an act (alternative)is and what the profit could have been had the best decision been made.

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Question 1

Correct Answer:

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True

The difference between expected payoff under certainty and expected value of the best act without certainty is the:

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Question 2

Correct Answer:

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Video Business A high school student,who started doing videos as a hobby,is considering going into the videography business.The anticipated payoff table is: The following prior probabilities are assigned to the states of nature: P(poor)= 0.4,P(fair)= 0.4,and P(super)= 0.2. -{Video Business Narrative} Calculate the expected opportunity loss for each act with present information.What decision should be made using the EOL criterion?

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Question 3

Correct Answer:

Verified

EOL (Start)= (0.4)(12,000)+ (0.4)(0)+ (0.2)(0)= $4,800 EOL (Don't start)= (0.4)(0)+ (0.4)(10,000)+ (0.2)(15,000)= $7,000 The best decision (the decision with the smallest EOL)is to start the new business.Hence,EOL^* = $4,800.

Gross Profits The following payoff table shows gross profits (in $1000)associated with a set of 3 acts under 2 possible states of nature. $Gross Profits The following payoff table shows gross profits (in $1000)associated with a set of 3 acts under 2 possible states of nature. -{Gross Profits Narrative} If the probability of s1 is 0.5,then the optimal alternative using EMV is .$ -{Gross Profits Narrative} If the probability of s₁ is 0.5,then the optimal alternative using EMV is .

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Question 4

Worker safety laws would be considered a state of nature for a business firm.

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Question 5

Incorporating an investor's subjective probabilities with a consultant's numerical forecasts requires the use of ____________________ Law.

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Question 6

Gross Profits The following payoff table shows gross profits (in $1000)associated with a set of 3 acts under 2 possible states of nature. $Gross Profits The following payoff table shows gross profits (in $1000)associated with a set of 3 acts under 2 possible states of nature. -{Gross Profits Narrative} The opportunity loss for a2 when s1 occurs is.$ -{Gross Profits Narrative} The opportunity loss for a₂ when s₁ occurs is.

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Question 7

Demolition Company The payoff table and the prior probabilities for three states of nature for a demolition company are shown below: Prior Probabilities: P(s₁)= 0.4,P(s₂)= 0.5,and P(s₃)= 0.1. -{Demolition Company Narrative} Determine the EMV decision.

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Question 8

Gross Profits The following payoff table shows gross profits (in $1000)associated with a set of 3 acts under 2 possible states of nature. $Gross Profits The following payoff table shows gross profits (in $1000)associated with a set of 3 acts under 2 possible states of nature. -{Gross Profits Narrative} If the probability of s1 is 0.2 and s2 is 0.8,then the expected monetary value (EMV)of a1 is .$ -{Gross Profits Narrative} If the probability of s₁ is 0.2 and s₂ is 0.8,then the expected monetary value (EMV)of a₁ is .

(Short Answer)

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Question 9

Gas Company A payoff table for an electric company is shown below: The following prior probabilities are assigned to the states of nature: P(s₁)= 0.3,P(s₂)= 0.7. -{Gas Company Narrative} Calculate the expected opportunity loss for each act with present information.What decision should be made using the EOL criterion?

(Essay)

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Question 10

Gross Profits The following payoff table shows gross profits (in $1000)associated with a set of 3 acts under 2 possible states of nature. $Gross Profits The following payoff table shows gross profits (in $1000)associated with a set of 3 acts under 2 possible states of nature. -{Gross Profits Narrative} If the probability of s1 is 0.5,then the expected monetary value (EMV)for a1 is .$ -{Gross Profits Narrative} If the probability of s₁ is 0.5,then the expected monetary value (EMV)for a₁ is .

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Question 11

Gross Profits The following payoff table shows gross profits (in $1000)associated with a set of 3 acts under 2 possible states of nature. $Gross Profits The following payoff table shows gross profits (in $1000)associated with a set of 3 acts under 2 possible states of nature. -{Gross Profits Narrative} If the probability of s1 is 0.2 and s2 is 0.8,then the expected opportunity loss (EOL)for a1 is .$ -{Gross Profits Narrative} If the probability of s₁ is 0.2 and s₂ is 0.8,then the expected opportunity loss (EOL)for a₁ is .

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Question 12

Graphic Design Business A high school student,who started doing graphic designs as a hobby,is considering going into the graphic design business.The anticipated payoff table is: The following prior probabilities are assigned to the states of nature: P(poor)= 0.4,P(fair)= 0.4,and P(super)= 0.2. -{Graphic Design Business Narrative} What is the expected value of perfect information? What does it mean?

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Question 13

Which of the following would not be considered a state of nature for a business firm?

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Question 14

Candy Store A payoff table for a Candy store is shown below. The following prior probabilities are assigned to the states of nature: P(s₁)= 0.2,P(s₂)= 0.6,and P(s₃)= 0.2. -{Candy Store Narrative} What is the expected payoff with perfect information?

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Question 15

The expected value of sample information (EVSI)is the difference between the expected monetary value with additional information (EMV')and the expected monetary value without additional information (EMV^).That is,EVSI = (EMV')− EMV^.

(True/False)

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Question 16

Container Company A company must decide whether or not to change its packaging to a more environmentally safe material.The impact of the decision on profits depends on which of the following three possible scenarios develops in the future. Scenario 1: The media does not focus heavily on concerns about packaging and no new laws requiring changes in packaging are passed.Under this scenario,the company will make $35 million if they change their packaging now,but will make $75 million if they do not change their packaging now. Scenario 2: The media does focus heavily on concerns about packaging and no new laws requiring changes in packaging are passed.Under this scenario,the company will make $50 million if they change their packaging now,but will make $55 million if they do not change their packaging now. Scenario 3: The media does focus heavily on concerns about packaging and new laws requiring changes in packaging are passed.Under this scenario,the company will make $60 million if they change their packaging now,but will make only $15 million if they do not change their packaging now. The prior probabilities of the three scenarios are 0.3,0.5,and 0.2,respectively. -{Container Company Narrative} What decision will be made to maximize expected payoff?

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Question 17

Maintenance Company For a maintenance company,a payoff table,the prior probabilities for three states of nature,and the likelihood probabilities are shown below: Payoff Table: Prior Probabilities: P(s₁)= 0.4,P(s₂)= 0.5,and P(s₃)= 0.1. Likelihood Probabilities: -{Maintenance Company Narrative} What is the expected payoff with perfect information?

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Question 18

Sporting Goods Store A payoff table for a clothing store is shown below. The following prior probabilities are assigned to the states of nature: P(s₁)= 0.2,P(s₂)= 0.6,and P(s₃)= 0.2. -{Sporting Goods Store Narrative} Determine the EOL decision.

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Question 19

The expected value of perfect information (EVPI)is the difference between the expected payoff with perfect information (EPPI)and the expected monetary value (EMV^).That is,EVPI = EPPI − EMV^.

(True/False)

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Question 20

Showing 1 - 20 of 123

An opportunity loss is the difference between what the decision maker's profit for an act (alternative)is and what the profit could have been had the best decision been made.

The difference between expected payoff under certainty and expected value of the best act without certainty is the:

Worker safety laws would be considered a state of nature for a business firm.

Incorporating an investor's subjective probabilities with a consultant's numerical forecasts requires the use of ____________________ Law.

Demolition Company The payoff table and the prior probabilities for three states of nature for a demolition company are shown below: Prior Probabilities: P(s₁)= 0.4,P(s₂)= 0.5,and P(s₃)= 0.1. -{Demolition Company Narrative} Determine the EMV decision.

Which of the following would not be considered a state of nature for a business firm?

Candy Store A payoff table for a Candy store is shown below. The following prior probabilities are assigned to the states of nature: P(s₁)= 0.2,P(s₂)= 0.6,and P(s₃)= 0.2. -{Candy Store Narrative} What is the expected payoff with perfect information?

The expected value of sample information (EVSI)is the difference between the expected monetary value with additional information (EMV')and the expected monetary value without additional information (EMV^).That is,EVSI = (EMV')− EMV^.

Sporting Goods Store A payoff table for a clothing store is shown below. The following prior probabilities are assigned to the states of nature: P(s₁)= 0.2,P(s₂)= 0.6,and P(s₃)= 0.2. -{Sporting Goods Store Narrative} Determine the EOL decision.

The expected value of perfect information (EVPI)is the difference between the expected payoff with perfect information (EPPI)and the expected monetary value (EMV^).That is,EVPI = EPPI − EMV^.

What Is Statistics

Graphical Descriptive Techniques 1

Graphical Descriptive Techniques 2

Numerical Descriptive Techniques

Data Collection and Sampling

Probability

Random Variables and Discrete Probability Distributions

Continuous Probability Distributions

Sampling Distributions

Introduction to Estimation

Introduction to Hypothesis Testing

Inference About a Population

Inference About Comparing Two Populations

Analysis of Variance

Chi-Squared Tests

Simple Linear Regression and Correlation

Multiple Regression

Model Building

Nonparametric Statistics

Time-Series Analytics and Forecasting

Statistical Process Control

Conclusion

Filters

Exam 22: Decision Analysis

An opportunity loss is the difference between what the decision maker's profit for an act (alternative)is and what the profit could have been had the best decision been made.

The difference between expected payoff under certainty and expected value of the best act without certainty is the:

Gross Profits The following payoff table shows gross profits (in $1000)associated with a set of 3 acts under 2 possible states of nature. ​ ​ -{Gross Profits Narrative} If the probability of s1 is 0.5,then the optimal alternative using EMV is ____________________.

Worker safety laws would be considered a state of nature for a business firm.

Incorporating an investor's subjective probabilities with a consultant's numerical forecasts requires the use of ____________________ Law.

Gross Profits The following payoff table shows gross profits (in $1000)associated with a set of 3 acts under 2 possible states of nature. ​ ​ -{Gross Profits Narrative} The opportunity loss for a2 when s1 occurs is________________.

Demolition Company The payoff table and the prior probabilities for three states of nature for a demolition company are shown below: Prior Probabilities: P(s1)= 0.4,P(s2)= 0.5,and P(s3)= 0.1. ​ ​ -{Demolition Company Narrative} Determine the EMV decision.

Gross Profits The following payoff table shows gross profits (in $1000)associated with a set of 3 acts under 2 possible states of nature. ​ ​ -{Gross Profits Narrative} If the probability of s1 is 0.2 and s2 is 0.8,then the expected monetary value (EMV)of a1 is ____________________.

Gross Profits The following payoff table shows gross profits (in $1000)associated with a set of 3 acts under 2 possible states of nature. ​ ​ -{Gross Profits Narrative} If the probability of s1 is 0.5,then the expected monetary value (EMV)for a1 is ____________________.

Gross Profits The following payoff table shows gross profits (in $1000)associated with a set of 3 acts under 2 possible states of nature. ​ ​ -{Gross Profits Narrative} If the probability of s1 is 0.2 and s2 is 0.8,then the expected opportunity loss (EOL)for a1 is ____________________.

Which of the following would not be considered a state of nature for a business firm?

Candy Store A payoff table for a Candy store is shown below. The following prior probabilities are assigned to the states of nature: P(s1)= 0.2,P(s2)= 0.6,and P(s3)= 0.2. ​ ​ -{Candy Store Narrative} What is the expected payoff with perfect information?

The expected value of sample information (EVSI)is the difference between the expected monetary value with additional information (EMV')and the expected monetary value without additional information (EMV*).That is,EVSI = (EMV')− EMV*.

Sporting Goods Store A payoff table for a clothing store is shown below. The following prior probabilities are assigned to the states of nature: P(s1)= 0.2,P(s2)= 0.6,and P(s3)= 0.2. ​ ​ -{Sporting Goods Store Narrative} Determine the EOL decision.

The expected value of perfect information (EVPI)is the difference between the expected payoff with perfect information (EPPI)and the expected monetary value (EMV*).That is,EVPI = EPPI − EMV*.

What Is Statistics

Graphical Descriptive Techniques 1

Graphical Descriptive Techniques 2

Numerical Descriptive Techniques

Data Collection and Sampling

Probability

Random Variables and Discrete Probability Distributions

Continuous Probability Distributions

Sampling Distributions

Introduction to Estimation

Introduction to Hypothesis Testing

Inference About a Population

Inference About Comparing Two Populations

Analysis of Variance

Chi-Squared Tests

Simple Linear Regression and Correlation

Multiple Regression

Model Building

Nonparametric Statistics

Time-Series Analytics and Forecasting

Statistical Process Control

Conclusion

Filters

Demolition Company The payoff table and the prior probabilities for three states of nature for a demolition company are shown below: Prior Probabilities: P(s₁)= 0.4,P(s₂)= 0.5,and P(s₃)= 0.1. -{Demolition Company Narrative} Determine the EMV decision.

Candy Store A payoff table for a Candy store is shown below. The following prior probabilities are assigned to the states of nature: P(s₁)= 0.2,P(s₂)= 0.6,and P(s₃)= 0.2. -{Candy Store Narrative} What is the expected payoff with perfect information?

The expected value of sample information (EVSI)is the difference between the expected monetary value with additional information (EMV')and the expected monetary value without additional information (EMV^).That is,EVSI = (EMV')− EMV^.

Sporting Goods Store A payoff table for a clothing store is shown below. The following prior probabilities are assigned to the states of nature: P(s₁)= 0.2,P(s₂)= 0.6,and P(s₃)= 0.2. -{Sporting Goods Store Narrative} Determine the EOL decision.

The expected value of perfect information (EVPI)is the difference between the expected payoff with perfect information (EPPI)and the expected monetary value (EMV^).That is,EVPI = EPPI − EMV^.