Given the following conditional value table, determine the appropriate decision assuming that each state of nature has an equal likelihoodof occurring:States of NatureAlternativesLarge plantVery Favorable Market$275,000Average Market$100,000Unfavorable Market- $150,000Small plantOvertimeDo nothing$200,000$60,000-$10,000$100,000$40,000-$1,000$0$0$0The appropriate decision is towhich has an EMV = $(round your response to the nearest whole number).

In given below i explain step by step process. Please follow the process.Please give positive…

Answered: Given the following conditional value…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section9.4: The Precision Tree Add-in

Problem 9P

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3. The manager for a manufacturing company must recommend whether to construct a large plant, construct a small plant or do nothing. He estimates the long-run profits in $ as follows: State of Nature Alternative Good Average Poor Market($) Market ($) Market ($) Construct a 100,000 35,000 -60,000 large plant Construct a 75,000 25,000 -40,000 small plant Do nothing -5,000 0 0 Probability 25% 50% 25% Solve using: A. Expected Opportunity Loss B. Expected Value of Perfect Information
Doing nothing would yield how much profit if favorable market conditions prevail according to the following profit decision table? Alternative Favorable Market Do Nothing $27,000 $12,000 $0 -$15,000 $27,000 Unfavorable Market -$15,000
How would you go about attempting to come upwith the probability of a “super-event” or the probability of a“unique-event?” What factors would you consider?
Very Favorable Average Market Unfavorable Alternatives Market Market Build new plant $250,000 $180.000 - S200,000 Subcontract $270.000 $185,000 - $220,000 Overtime S100.000 $50,000 - $12.000 Do Nothing SO SO $0 a) Using the decision making under uncertainty with the criterion of Maximax The appropriate decision will be The value of the return under this decision is $ b) Using the decision making under uncertainty with the criterion of Maximin The appropriate decision will be The value of the return under this decision is $ c) Using the decision making under uncertainty with the criterion of Equally Likely The appropriate decision will be The value of the return under this decision is $ (enter your answer as a whole number).
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The Gorman Manufacturing Company must decide whether to manufacture a component part at its Milan, Michigan, plant or purchase the component part from a supplier. The resulting profit is dependent upon the demand for the product. The following payoff table shows the projected profit (in thousands of dollars): Decision State of Nature Alternative Low Demand (S1) Medium Demand (S2) High Demand )S3) Manufacture, d(1) -20 40 100 Purchase, d(2) 10 45 70 The state-of-nature probabilities are P s1= 0.35, P s2= 0.35, and P s3= 0.30 Use expected value to recommend a decision.
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Sun TV sells TV sets. It does not sell smart TVs so customers do not come to Sun TV if they want to purchase smart TVs. Sun TV wants to start selling smart TVs and will only sell smart TVs to customers to whom they advertise. Managers use customer information (income level, previous purchase history) to decide which customers they should target. The team needs to decide how sure it must be in predicting customer interest in a smart TV. If it is too cautious, it will choose a very high cutoff probability and only market to customers who it believes are very likely to be in the market for a smart TV. This may cause them to miss out on many customers. If they are too aggressive and choose a low cutoff probability, they may identify more individuals interested in buying smart TVs but also end up wasting marketing dollars on customers who are not interested in purchasing smart TVs. To choose a cutoff probability, the team develops the confusion matrices below for two cutoff probabilities on…

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