Mat 540 mat540 week 2 homework assignment (latest updated on jan 14

 (If the Numbers are Different then jsut change the number in Excel and you will get the correct answers)

 

 

MAT540

 

Week 2 Homework

 

Chapter 12

 

1. A local real estate investor in Orlando is considering three alternative investments: a motel, a restaurant, or a theater. Profits from the motel or restaurant will be affected by the availability of gasoline and the number of tourists; profits from the theater will be relatively stable under any conditions. The following payoff table shows the profit or loss that could result from each investment:

 

 

 

               Gasoline Availability

 

Investment       Shortage             Stable Supply   Surplus

 

Motel                    $-8,000                 $15,000                 $20,000

 

Restaurant            2,000                  8,000         6,000

 

Theater                 6,000                   6,000                        5,000

 

 

 

Determine the best investment, using the following decision criteria.

 

a. Maximax

 

b. Maximin

 

c. Minimax regret

 

d. Hurwicz (α = 0.4)

 

e. Equal likelihood

 

2. A concessions manager at the Tech versus A&M football game must decide whether to have the vendors sell sun visors or umbrellas. There is a 30% chance of rain, a 15% chance of overcast skies, and a 55% chance of sunshine, according to the weather forecast in College Junction, where the game is to be held. The manager estimates that the following profits will result from each decision, given each set of weather conditions:

 

 

 

              

 

Weather Conditions

 

Decision              Rain       Overcast              Sunshine

 

       .30             .15                         .55

 

      Sun visors    $-500          $-200                       $1,500

 

      Umbrellas    2,000               0                             -900

 

a. Compute the expected value for each decision and select the best one.

 

b. Develop the opportunity loss table and compute the expected opportunity loss for each decision.

 

3. Place-Plus, a real estate development firm, is considering several alternative development projects. These include building and leasing an office park, purchasing a parcel of land and building an office building to rent, buying and leasing a warehouse, building a strip mall, and building and selling condominiums. The financial success of these projects depends on interest rate movement in the next 5 years. The various development projects and their 5-year financial return (in $1,000,000s) given that interest rates will decline, remain stable, or increase, are shown in the following payoff table. Place-Plus real estate development firm has hired an economist to assign a probability to each direction interest rates may take over the next 5 years. The economist has determined that there is a .50 probability that interest rates will decline, a .40 probability that rates will remain stable, and a .10 probability that rates will increase.

 

a. Using expected value, determine the best project.

 

b. Determine the expected value of perfect information.

 

 

 

                                   Interest Rate

 

Project                          Decline          Stable                        Increase

 

Office park        $0.5              $1.7             $4.5

 

Office building                 1.5                1.9                                 2.5

 

Warehouse        1.7               1.4                                1.0

 

Mall                     0.7                  2.4                                3.6

 

Condominiums                 3.2               1.5                                0.6

 

 

 

 

 

 

 

4. The director of career advising at Orange Community College wants to use decision analysis to provide information to help students decide which 2-year degree program they should pursue. The director has set up the following payoff table for six of the most popular and successful degree programs at OCC that shows the estimated 5-year gross income ($) from each degree for four future economic conditions:

 

 

 

               Economic Conditions

 

Degree Program               Recession          Average                              Good                            Robust

 

 Graphic design                  145,000           175,000                  220,000                   260,000

 

Nursing                                150,000          180,000                                  205,000                         215,000

 

Real estate                       115,000           165,000                                 220,000                          320,000

 

Medical technology      130,000            180,000                                 210,000                          280,000

 

Culinary technology      115,000            145,000                                  235,000                         305,000

 

Computer                          125,000           150,000                               190,000               250,000

 

information technology              

 

 

 

 

 

Determine the best degree program in terms of projected income, using the following decision criteria:

 

a. Maximax

 

b. Maximin

 

c. Equal likelihood

 

d. Hurwicz (α = 0.50)

 

 

 

 

 

 

 

 

 

5. Construct a decision tree for the following decision situation and indicate the best decision.

 

Fenton and Farrah Friendly, husband-and-wife car dealers, are soon going to open a new dealership. They have three offers: from a foreign compact car company, from a U.S. producer of full-sized cars, and from a truck company. The success of each type of dealership will depend on how much gasoline is going to be available during the next few years. The profit from each type of dealership, given the availability of gas, is shown in the following payoff table:

 

 

 

               Gasoline Availability      

 

Dealership         Shortage              Surplus                  

 

                                      .6                         .4          

 

Compact cars    $ 300,000             $150,000             

 

Full-sized cars  -100,000               600,000                 

 

Trucks                 120,000    170,000              

 

 

 

Decision Tree diagram to complete:  (Please see below)

 

              

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EssayProffesor.com
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

Essays

Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

Admissions

Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

Reviews

Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

Reviews

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.