Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
12th Edition
ISBN: 9780134741062
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter A, Problem 22P
Summary Introduction
Interpretation: The expected payoff for the best alternative is to be determined by using the decision tree.
Concept Introduction:
Decision tree can be defined as the decision support tool or tree like decision model which is used to represents the series of decisions and their objective way to evaluate the alterative.
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Students have asked these similar questions
Come up with a decision using each of the different criteria under conditions of uncertainty using the table below. The payoff values are expressed as LOSSES.
A payoff table is given as:
S1
S2
S3
D1
250
750
500
D2
300
-250
1200
D3
500
500
600
(a) What choice should be made by the optimistic decision maker?
(b) What choice should be made by the conservative decision maker?
(c) What decision should be made under minimal regret?
(d) If the probabilities of d1, d2, and d3 are .2, .5, and .3, respectively, then what choice should be made under expected value?
Payoff Table
Decision Alternatives
Demand
Low
Medium
High
Small, d1
400
500
600
Medium, d2
100
600
800
Large, d3
-300
400
1200
1). If nothing is known about the demand probabilities, what are the recommended decision using the Maximax
(optimistic), Maximin (pessimistic) and Equally Likely?
2). If P(low) = 0.20, P(medium) = 0.35, and P(high) = 0.45. What is the recommended decision using the expected monetary value approach?
3). What is the expected value of perfect information (EVPI)?
Chapter A Solutions
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
Ch. A - Mary Williams, owner of Williams Products, is...Ch. A - Prob. 2PCh. A - An interactive television service that costs $10...Ch. A - A restaurant is considering adding fresh brook...Ch. A - Spartan Castings must implement a manufacturing...Ch. A - A news clipping service is considering...Ch. A - Prob. 7PCh. A - Techno Corporation is currently manufacturing an...Ch. A - The Tri-County Generation and Transmission...Ch. A - Prob. 10P
Ch. A - Tri-County G&T sells 150,000 MWh per year of...Ch. A - The Forsite Company is screening three ideas for...Ch. A - Prob. 13PCh. A - Prob. 14PCh. A - Janice Gould of Krebs Consulting is in the process...Ch. A - Build-Rite Construction has received favorable...Ch. A - Prob. 17PCh. A - Prob. 18PCh. A - Prob. 20PCh. A - Prob. 21PCh. A - Prob. 22PCh. A - Prob. 24P
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