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An Introduction to Management Science 13th Edition by David Anderson,Dennis Sweeney ,Thomas Williams ,Jeffrey Camm, Kipp Martin
Edition 13ISBN: 978-1439043271An Introduction to Management Science 13th Edition by David Anderson,Dennis Sweeney ,Thomas Williams ,Jeffrey Camm, Kipp Martin
Edition 13ISBN: 978-1439043271 Exercise 1
The following payoff table shows the profit for a decision problem with two states of nature and two decision alternatives: 
a. Use graphical sensitivity analysis to determine the range of probabilities of state of nature s 1 for which each of the decision alternatives has the largest expected value.
b. Suppose P ( s 1 ) = 0.2 and P ( s 2 ) = 0.8. What is the best decision using the expected value approach?
c. Perform sensitivity analysis on the payoffs for decision alternative d 1. Assume the probabilities are as given in part (b) and find the range of payoffs under states of nature s 1 and s 2 that will keep the solution found in part (b) optimal. Is the solution more sensitive to the payoff under state of nature s 1 or s 2 ?
a. Use graphical sensitivity analysis to determine the range of probabilities of state of nature s 1 for which each of the decision alternatives has the largest expected value.
b. Suppose P ( s 1 ) = 0.2 and P ( s 2 ) = 0.8. What is the best decision using the expected value approach?
c. Perform sensitivity analysis on the payoffs for decision alternative d 1. Assume the probabilities are as given in part (b) and find the range of payoffs under states of nature s 1 and s 2 that will keep the solution found in part (b) optimal. Is the solution more sensitive to the payoff under state of nature s 1 or s 2 ?
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Determine the range of probabilities of ...
An Introduction to Management Science 13th Edition by David Anderson,Dennis Sweeney ,Thomas Williams ,Jeffrey Camm, Kipp Martin
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