Exam 23: Work Measurement, Learning Curves, and Standards

In the following profit table, d_i represents decision variables and S_i represents states of nature. 15.00 15.00 15.00 15.00 -10.00 -5.00 25.00 25.00 -35.00 0 40.00 60.00 -60.00 -20.00 50.00 90.00 a. If management assigns probabilities as follows: S₁ = 0.15; S₂ = 0.25; S₃ = 0.40; and S₄ = 0.20, determine the expected value for d₂. b. Determine the expected value for d₃. c. Assuming the largest expected value for a decision variable is 24.00, determine the value of perfect information.

Risk is a form of uncertainty associated with an unexpected good or undesirable outcome.

Decision analysis situations often have multiple objectives.

All of the following are characteristics of management decisions for which decision analysis techniques apply except