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

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

lease complete 7 problems and 1 discussion questionsComplete 8 16 24 25 32 36 show work. Question 13 is listed for reference. Complete 1 discussion questions.Chapter 12 Problems 8 problems8) A local real estate investor in Orlando is considering 3 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 tourist: 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 AvailabilityInvestmentShortageStable SupplySurplusMotel$ -8000$15000$20000Restaurant200080006000Theater600060005000
Determine the best investment using the following decision criteria: MaximaxMaximinMinimax regretHurwicz (a=.A)Equal likelihood
13) Place-Plus a real estate development firm is conducting 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 condos. The financial success of these projects depend on interest rate movement in the next 3 years. The various development projects and their 5 year financial return(in $1000000s) given that interest rates will decline remain stable or increase are shown in the following payoff table.
Interest RateProjectDeclineStableIncreaseOffice Park$0.5$1.7$4.5Office Building1.51.92.5Warehouse1.71.41.0Mall0.72.43.6Condo3.21.50.6
MaximaxMaximinEqual likelihoodHurwicz (a=.3)
16). A Concession manager at the Tech v. A&M football game must decide whether to have vendors sell sun visors or umbrellas. There is a 30% chance of rain a 15% chance of overcast skies and 55% chance of sunshine. according to the weather forecast in College Junction where the game is to be held. The manager estimates that the following profits will result from each decision given each set of weather condition.DecisionRain.30Overcast.15Sunshine.55Sunvisors$-500$-200$ 1500Umbrellas20000-900.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.
24). In 13 the Place-Plus 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 have 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.
32) 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 ($) from each degree for four future economics.Economic ConditionDegree ProgramRecessionAverageGoodRobustNursing150000180000205000215000Real Estate115000165000220000320000Medical Terminology130000180000210000280000Culinary Technology115000145000235000305000Computer Information Tech125000150000190000250000Graphic Design145000175000220000260000Determine the best degree program in terms of projected income using the following decision criteria:MaximaxMaximinEqual likelihoodHurwicz (a=.50)36) Construct a decision tree for the decision situation described in Problem 25 and indicate the best decision. Problem
25) Fenton and Farrah Friendly husband and wife car dealers are soon going to open a new dealership. They have three offers: from a foreign compact care company: The success of each type of dealership will depend on how much gasoline is going to be available during the next few years. The profit from each type of dealership given the availability of gas is shown I the following payoff table.Gasoline AvailabilityDealershipShortage.6Surplus.4Compact cars$ 300000$150000Full-sized Cars-10000600000Trucks120000170000
Discussion QuestionIn your own words explain how to obtain the expected value of perfect information for any payoff table which has probabilities associated with each state of nature. Then provide an example drawing from any of the payoff tables in Problems 1-17 in the back of Chapter 12. If no probabilities are given for the states of nature then assume equal likelihood.
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