The following is a payoff an Electronic Company's ProductThe State of NateDecision Alternative0.690.31S2D114D213D311The Expected values for the payoff tableas follows:E(D1=5.72EID2)=11.45EID3)9.14What should be the payoff value for the D2 under S1 to keep the solution.orClek Sne and Sub toabeit Cliok Soella e all ao D12.14D213D311The Expected values for the payoff tableas follows:5.7211.45EID9.14What should be the payoff value for the D2 under S1 to keep the solution optimal at D2O< 10.3O32.4859.65O>0.90QUESTION 11Checku sit Cek Sace AlLAners mme all anTS

Answered: 01 14 D2 13 Ds 11 The Expected values…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section9.3: Single-stage Decision Problems

Problem 5P

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A. A company wants to produce a souvenir with a marketing life of six months. Uncertainty surrounds the likely sales volume as well as the fixed costs of the venture as shown below: Sales units Probability Contrn. /unit Probability Fixed cost K7 K5 100 000 0.3 80 000 0.6 60 000 0.1 1.0 0.5 0.5 1.0 Determine the expected value of the contribution K400 000 K450 000 K500 000 Probability 0.2 0.5 0.3 1.0
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#17FAVORABLE UNFAVORABLEMARKET MARKETEQUIPMENT ( $) ($)Sub 100 300,000 –200,000Oiler J 250,000 –100,000Texan 75,000 –18,000For example, if Ken purchases a Sub 100 and ifthere is a favorable market, he will realize a profitof $300,000. On the other hand, if the market is unfavorable, Ken will suffer a loss of $200,000. ButKen has always been a very optimistic decisionmaker.(a) What type of decision is Ken facing?(b) What decision criterion should he use?(c) What alternative is best? #18Although Ken Brown (discussed in Problem 3-17) is the principal owner of Brown Oil, his brother Bob iscredited with making the company a financial success. Bob is vice president of finance. Bob attributeshis success to his pessimistic attitude about business and the oil industry. Given the information fromProblem 3-17, it is likely that Bob will arrive at a different decision. What decision criterion should Bobuse, and what alternative…
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01 14 D2 13 Ds 11 The Expected values for the payoff table as follows: 5.72 11.45 EDs 9.14 What should be the payoff value for the D2 under S1 to keep the solution optimal at D2T O<10.3 O4248 O9.65 QUESTION 11 Cl Sve 1c