Cathy is the manager of Fancy Bags, a store that sells designer purses. Cathy knows that the economy greatly affects her business. Therefore, she is developing alternative courses of action for each of the four possible economic outcomes that may occur over the next four to six years. In this situation, Cathy is following the garbage can model. generating contingency plans. engaging in satisficing implementing a decision Omaking a programmed decision.
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- Suppose you are a manager in some leading firm / organization. The owner of the firm wants you to uplift the profit of the firm by introducing some new commodity in the market. Explain all decision making process relating to successfully introducing your commodity in the market.Your company must decide whether to introduce a new product. The sales of the product will be either at a high (success) or low (failure) level. The conditional value for this decision is as follows Decision High Low Introduce $4,000,000 -$2,000,000 Do Not Introduce 0 0 Probability 0.3 0.7 You have the option to conduct a market survey to sharpen you market demand estimate. The survey costs $200,000. The survey provides incomplete information about the sales, with three possible outcomes: (1) predicts high sales, (2) predicts low sales, or (3) inconclusive. Such surveys have in the past provided these results Result High Low Predicts High 0.4 0.1 Inconclusive 0.4 0.5 Predicts Low 0.2 0.4 c) Draw the complete decision tree, including the survey option. Explain where the values on the decision tree come fromUsing the following table, perform ALL FIVE of the techniques for Decision Making under Uncertainty: Maximax, Maximin, Hurwicz Realism (α = 0.7), LaPlace and Minimax Regret. Use the .50 for the probability of a Good Economy and .50 for the probability of a Poor Economy. You must show your work. STATE OF NATURE DECISION ALTERNATIVE GOOD ECONOMY POOR ECONOMY Sotck market 80,000 -20,000 Bonds 30,000 20,000 CDs 23,000 23,000
- A decision tree is a graphic display of the decision process that indicates decision alternatives, states of nature and their respective probabilities, and payoffs for each combination of alternative and states of nature. O True O False * Previous Next ► MacBook Air 000 000 DD F7 セゴ F5 $ & レ 9 * 00Using the following table, perform ALL FIVE of the techniques for Decision Making under Uncertainty: Maximax, Maximin, Hurwicz Realism (α = 0.7), LaPlace and Minimax Regret. Use the .50 for the probability of a Good Economy and .50 for the probability of a Poor Economy. You must show your work for obtaining the points. STATE OF NATURE DECISION ALTERNATIVE GOOD ECONOMY POOR ECONOMY Sotck market 80,000 -20,000 Bonds 30,000 20,000 CDs 23,000 23,000Devise a solution for the problem under each of the four criteria of decisions under uncertainty.
- Use the table below to answer the questions that follow and caculate the Expected Monetary Value(EMV) of the different outcomesDECISION TABLE WITH CONDITIONAL VALUESSTATE OF NATUREFAVORABLE OUTCOME UNFAVORABLE OUTCOMEALTERNATIVES ($) ($)Start a big Company 2,000,000 -500,000Start a small company 800,000 -200,000Build Nothing 0 0Probabilities 0.3 0.7Calculate the following The EMV Maximin criterion Maximax criterion Minimax criterionHow does the presence of uncertainty affect the usefulness of the model?You often hear about the trade-off between risk and reward. Is this trade-off part of decision making under uncertainty when the decision maker uses theEMV criterion? For example, how does this work in investment decisions?
- Use graphical sensitivity analysis to determine the range of probabilities for which each decision alternative has the largest expected value. The payoffs represent projected profits. Write clear conclusion. Round values of p to 3 decimal places.Review the six-step decision-making process outlined below, then answer the question that follows. Step 1: Define the problem Step 2: Identify alternatives to the problem Step 3: Evaluate the identified alternatives Step 4: Make the decision Step 5: Implement the decision Step 6: Evaluate the decision A customer is frequently slow in paying invoices—sometimes as late as 30 days. Is this because (1) he does not manage his books well, (2) he is trying to conserve his working capital as long as possible, or (3) his own customers are often slow in paying him for the goods he sells them? Consider that there may be another explanation as well. Based on your ethical concerns, use the six-step decision-making process to arrive at a solution. Explain your reasoning for each of these steps.Margaret Quinn, the president of Eastern Electric Corporation, one of the large electric utilities operating in the eastern United States, had long been convinced that effective planning in the company was absolutely essential to success. For more than 10 years she had tried to get a company planning program installed without seeing much result. Over this time, she had consecutively appointed three vice presidents in charge of planning and, although each had seemed to work hard at the job, she noticed that individual department heads kept going their own ways. They made decisions on problems as they came up, and they prided themselves on doing an effective job of "fighting fires." But the company seemed to be drifting, and individual decisions of department heads did not always tally with each other. The executive in charge of regulatory matters was always pressing state commissions to allow higher electric rates without having very much luck, since the commissions felt that costs,…