1. George wishes to determine which of four investment strategies to use, given the payoff table here showing his annual returns (in thousands of shillings). The final outcome depends on what the government does in its upcoming tax bill. Strategy Taxes Go Up Go Down No Change 1 -25 50 30 2 -22 40 30 3 40 35 50 4 37 40 50 a. Which investment strategy should James use if he is pessimistic regarding the future? b. Which investment strategy should James use of he is optimistic regarding the future? c. Which investment strategy should James use if he uses the Minimax Regret criterion? 2. Two different models are available for the same machine. The production statistics (number of units produced per hour) of these two models are given below. The data was collected on different days. Model A 180 176 184 181 190 137 Model B 195 194 190 192 187 185 187 Will you conclude that Model A and Model B have the same productivity? 3. How large a sample should be selected to provide a 95% confidence interval with a margin of error of 10? Assume that the population standard deviation

1. George wishes to determine which of four investment strategies to use, given the payoff table here showing his annual returns (in thousands of shillings). The final outcome depends on what the government does in its upcoming tax bill. Strategy Taxes Go Up Go Down No Change 1 -25 50 30 2 -22 40 30 3 40 35 50 4 37 40 50 a. Which investment strategy should James use if he is pessimistic regarding the future? b. Which investment strategy should James use of he is optimistic regarding the future? c. Which investment strategy should James use if he uses the Minimax Regret criterion? 2. Two different models are available for the same machine. The production statistics (number of units produced per hour) of these two models are given below. The data was collected on different days. Model A 180 176 184 181 190 137 Model B 195 194 190 192 187 185 187 Will you conclude that Model A and Model B have the same productivity? 3. How large a sample should be selected to provide a 95% confidence interval with a margin of error of 10? Assume that the population standard deviation

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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