5. Shift-in-charge Nazar Al Rushdy: Nazar is pessimistic about the market price. What is your guidance for Nazar? The decision to employ decision trees in crucial situations has been taken by Salem Al Harthi, the plant manager. The table below presents data on demand for a duration of 6 hours along with their respective probabilities. The first row of the table provides the probability of demand for the initial three hours when a leak occurs, denoted in parentheses. Subsequently, the following three rows indicate the probabilities of high, medium, and low demand for the succeeding three hours. To illustrate, if the initial 3-hour market price was low, the probabilities of high demand, medium demand, and low demand in the next three hours are 0.2, 0.3, and 0.5, respectively. Market price High Market price Medium Initial 3-hrs (0.2) Initial 3-hrs (0.5) Market price Low Initial 3-hrs (0.3) High demand (next (0.5) (0.4) (0.2) 3 hrs) Medium demand (0.3) (0.2) (0.3) (next 3 hours) Low demand (next (0.2) (0.4) (0.5) 3 hours) Discussion Question 6. Make a decision tree and suggest what decision to make: repair HRSG immediately or delay it for the next shift.
5. Shift-in-charge Nazar Al Rushdy: Nazar is pessimistic about the market price. What is your guidance for Nazar? The decision to employ decision trees in crucial situations has been taken by Salem Al Harthi, the plant manager. The table below presents data on demand for a duration of 6 hours along with their respective probabilities. The first row of the table provides the probability of demand for the initial three hours when a leak occurs, denoted in parentheses. Subsequently, the following three rows indicate the probabilities of high, medium, and low demand for the succeeding three hours. To illustrate, if the initial 3-hour market price was low, the probabilities of high demand, medium demand, and low demand in the next three hours are 0.2, 0.3, and 0.5, respectively. Market price High Market price Medium Initial 3-hrs (0.2) Initial 3-hrs (0.5) Market price Low Initial 3-hrs (0.3) High demand (next (0.5) (0.4) (0.2) 3 hrs) Medium demand (0.3) (0.2) (0.3) (next 3 hours) Low demand (next (0.2) (0.4) (0.5) 3 hours) Discussion Question 6. Make a decision tree and suggest what decision to make: repair HRSG immediately or delay it for the next shift.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:5. Shift-in-charge Nazar Al Rushdy: Nazar is pessimistic about the market price. What is
your guidance for Nazar?
The decision to employ decision trees in crucial situations has been taken by Salem Al Harthi,
the plant manager. The table below presents data on demand for a duration of 6 hours along
with their respective probabilities. The first row of the table provides the probability of demand
for the initial three hours when a leak occurs, denoted in parentheses. Subsequently, the
following three rows indicate the probabilities of high, medium, and low demand for the
succeeding three hours. To illustrate, if the initial 3-hour market price was low, the probabilities
of high demand, medium demand, and low demand in the next three hours are 0.2, 0.3, and 0.5,
respectively.
Market price High
Market price Medium
Initial 3-hrs (0.2)
Initial 3-hrs (0.5)
Market price Low
Initial 3-hrs (0.3)
High demand (next (0.5)
(0.4)
(0.2)
3 hrs)
Medium
demand (0.3)
(0.2)
(0.3)
(next 3 hours)
Low demand (next (0.2)
(0.4)
(0.5)
3 hours)
Discussion Question
6. Make a decision tree and suggest what decision to make: repair HRSG immediately or
delay it for the next shift.
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