thousands Expand: $80 thousands Subcontract: $70 thousands Hence‚ since $80 thousands is the best‚ choose to expand the firms using the maximax strategy b. Using Maximin Do nothing: $50 thousands Expand: $20 thousands Subcontract: $40 thousands Hence‚ since $50 thousands is the best‚ choose to do nothing using the maximin strategy c. Using Laplace For the Laplace criterion‚ first find the row totals‚ and then divide each of those amounts by number of states of nature. Thus‚ we have
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be the most beneficial. b. Maximin- - Determine the worst possible payoff of each alternative‚ and choose the alternative that has the “best worst”. Do Nothing – 50‚000 | Expand – 20‚000 | Subcontract – 40‚000 | With this option I would recommend to do nothing. a. Laplace- choosing the best average. Do Nothing – 55‚000 | Expand – 50‚000 | Subcontract –55‚000 | I would choose Do nothing or subcontract they are equally good decisions. b. Minimax regret Determines the worst
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MD 021 - Management and Operations Capacity Planning and Decision Theory ▪ Measures of capacity ▪ Bottlenecks ▪ Capacity strategies ▪ A systematic approach to capacity decisions ▪ Make or Buy Problem ▪ Decision Making Under Uncertainty and Risk‚ Decision Trees Capacity Planning Capacity is the maximum rate of output for a facility. Capacity planning
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| | | The maximax criterion results in theAnswer | | | | | Selected Answer: | maximum of the maximum payoffs | Correct Answer: | maximum of the maximum payoffs | | | | | Question 3 2 out of 2 points | | | The maximin approach to decision making refers toAnswer | | | | | Selected Answer: | maximizing the minimum return | Correct Answer: | maximizing the minimum return | | | | | Question 4 2 out of 2 points | | | The maximax criterion
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000 $500‚000 $250‚000 The best decision using the maximax criterion is the large investment of $1‚000‚000 because it has the most payoff. 2. Identify the best decision using the maximin criterion. Min -600‚000 -200‚000 25‚000 The best decision using the maximin criterion is the small investment of $25‚000. 3. Identify the best decision using the equal likely criterion. Average $1‚000‚000 + $400‚000 + (-600‚000) = 800‚000/3= 266
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and so on. II. Maximin It suggests that the decision-maker should choose the alternative which maximises the minimum payoff he can get. This pessimistic approach implies that the decision-maker should expect the worst to happen. III. Minimax A rule used in decision theory‚ game theory‚ statistics and philosophy for minimizing the possible loss for a worst case (maximum loss) scenario. Alternatively‚ it can be thought of as maximizing the minimum gain (maximin). Originally formulated
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Introduction to Management Science: Quantitative Methods: 50 Multiple Choice Questions Question 1 In a balanced transportation model where supply equals demand‚ a. all constraints are equalities b. none of the constraints are equalities c. all constraints are inequalities d. none of the constraints are inequalities Question 2 In a transportation problem‚ items are allocated from sources to destinations a. at a maximum cost b. at a minimum cost c. at a minimum profit d. at
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changes than do ____________ moving averages. 12. The maximin criterion results in the maximum of the minimum payoffs. 13. ___________ is a technique for selecting numbers randomly from a probability distribution. 14. Which of the following is incorrect with respect to the use of models in decision making? 15. In computer mathematical simulation a system is replicated with a mathematical model that is analyzed 16. The maximin criterion results in the 17. Analogue simulation replaces
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User Course Test Started Submitted Status Score Amy Mclaughlin Quantitative Methods Midterm Exam 11/6/11 5:27 PM 11/6/11 6:56 PM Completed 195 out of 200 points Time Elapsed 1 hour‚ 28 minutes out of 4 hours. Instructions false Question 1 5 out of 5 points Regret is the difference between the payoff from the best decision and all other decision payoffs. Answer Selected Answer: Correct Answer: Question 2 5 out of 5 points Variable costs are independent of volume and remain constant. True
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Availability Investment Shortage Stable Supply Surplus Motel $8‚000 $15‚000 $20‚000 Restaurant 2‚000 8‚000 6‚000 Theater 6‚000 6‚000 5‚000 Determine the best investment‚ using the following decision criteria. a. Maximax 20‚000 motel b. Maximin 5‚000 theater c. Minimax regret 14‚000 motel or Restaurant d. Hurwicz(a=.4) theather 5‚400 e. Equal likelihood =Motel 9‚000 16. A concessions manager at the Tech versus A&M football game must decide whether to have the vendors sell sun visors or umbrellas. There
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