MAT 540 Week 2 Homework - latest 2015

MAT 540 Week 2 Homework - latest 2015


MAT 540 Week 2 Homework - latest 2015


IF You Want To Purchase A+ Work Then Click The Link Below , Instant Download

http://www.hwspeed.com/MAT-540-Week-2-Homework-latest-2015-539000032.htm?categoryId=-1

If You Face Any Problem E- Mail Us At JOHNMATE1122@Gmail.Com




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



B 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....

Similar Essays