ITM 501 Lecture 3: ITM501 Lecture 3

• School: Ryerson University
• Department: Information Technology Management
• Course: ITM 501
• Professor: Amir Gandomi

Document Summary

Bestdecisionistodonothingaslongas p isbtw0 betheprobability associated wipointi wpoint1 emvfordoingnothingissaneasemv forfor asmallplant. Using hurwicz if we assume thatthedecision maker is 7040 optimistic the coefficient ofrealism theweightedaverageofthe best3 worst payoffwould becalculated using thisformula. Any problemthatcan bepresented in adecisiontablecanbegraphicallyrepresented in a decisiontree. Exam most beneficial when a sequence ofdecisions mustbemade. At state of nature node one state of nature will occur. 4 estimate payoffsforeachpossible combination of alternatives hp statesofnature. 5 solve the problem bycomputing expected monetary valves emus foreach state of nature node structure of decisiontrees. Linesor branches connectthedecisions nodes and states ofnature pickhighest enveness minimum. Emv of conducting survey is 49 zoo us. If survey results are favourable build largeplant if negative build small plant. Expectedvalue with sample information evwith si andthe cost of thesample info isadded to this isfound fromthe decisiontree since it was subtractedfromall the payoffs beforeeuwithsi was calculated expected awe without sampleinfo is thensubtractedfromthisto finduabe ofsample information.