Decision Analysis
Chapter 3 – Question 28
(a) Develop a decision table for this decision?
Decision Alternatives | Market (‘000) | | Good | Fair | Poor | Small | 50 | 20 | –10 | Medium | 80 | 30 | –20 | Large | 100 | 30 | –40 | Very Large | 300 | 25 | –160 |
(b) What is the maximax decision?
Decision Alternatives | Market (‘000) | Maximax decision shall be the maximum value of a row/decision alternatives | Maximax Decision Alternative | | Good | Fair | Poor | | | Small | 50 | 20 | –10 | | 50 | Medium | 80 | 30 | –20 | | 80 | Large | 100 | 30 | –40 | | 100 | Very Large | 300 | 25 | –160 | | 300 |
If maximax decision is to be chosen: The decision shall be to open VERY LARGE gasoline station.
(c) What is the maximin decision?
Decision Alternatives | Market (‘000) | Maximin decision shall be the most maximum value of a maximin decision alternatives | Maximin Decision Alternative | | Good | Fair | Poor | | | Small | 50 | 20 | –10 | | –10 | Medium | 80 | 30 | –20 | | –20 | Large | 100 | 30 | –40 | | –40 | Very Large | 300 | 25 | –160 | | –160 |
If maximin decision is to be chosen: The decision shall be to open SMALL gasoline station.
(d) What is the equally likely decision? Decision Alternatives | Market (‘000) | Equally Likely (Row Average) | Equally Likely Decision Alternative | | Good | Fair | Poor | = (Max – Min)/2 | | Small | 50 | 20 | –10 | = [50 + (-10)] / 2 | 20 | Medium | 80 | 30 | –20 | = [80 + (-20)] / 2 | 30 | Large | 100 | 30 | –40 | = [100 + (-40)] / 2 | 30 | Very Large | 300 | 25 | –160 | = [300 + (-160)] / 2 | 70 |
If equally likely decision is to be chosen: The decision shall be to open VERY LARGE gasoline station.
(e) What is the criterion of realism decision? Use an value of 0.8. Decision Alternatives | Market (‘000) | Criterion of Realism | Criterion of Realism Decision Alternative | | Good | Fair | Poor |
(a) Develop a decision table for this decision?
Decision Alternatives | Market (‘000) | | Good | Fair | Poor | Small | 50 | 20 | –10 | Medium | 80 | 30 | –20 | Large | 100 | 30 | –40 | Very Large | 300 | 25 | –160 |
(b) What is the maximax decision?
Decision Alternatives | Market (‘000) | Maximax decision shall be the maximum value of a row/decision alternatives | Maximax Decision Alternative | | Good | Fair | Poor | | | Small | 50 | 20 | –10 | | 50 | Medium | 80 | 30 | –20 | | 80 | Large | 100 | 30 | –40 | | 100 | Very Large | 300 | 25 | –160 | | 300 |
If maximax decision is to be chosen: The decision shall be to open VERY LARGE gasoline station.
(c) What is the maximin decision?
Decision Alternatives | Market (‘000) | Maximin decision shall be the most maximum value of a maximin decision alternatives | Maximin Decision Alternative | | Good | Fair | Poor | | | Small | 50 | 20 | –10 | | –10 | Medium | 80 | 30 | –20 | | –20 | Large | 100 | 30 | –40 | | –40 | Very Large | 300 | 25 | –160 | | –160 |
If maximin decision is to be chosen: The decision shall be to open SMALL gasoline station.
(d) What is the equally likely decision? Decision Alternatives | Market (‘000) | Equally Likely (Row Average) | Equally Likely Decision Alternative | | Good | Fair | Poor | = (Max – Min)/2 | | Small | 50 | 20 | –10 | = [50 + (-10)] / 2 | 20 | Medium | 80 | 30 | –20 | = [80 + (-20)] / 2 | 30 | Large | 100 | 30 | –40 | = [100 + (-40)] / 2 | 30 | Very Large | 300 | 25 | –160 | = [300 + (-160)] / 2 | 70 |
If equally likely decision is to be chosen: The decision shall be to open VERY LARGE gasoline station.
(e) What is the criterion of realism decision? Use an value of 0.8. Decision Alternatives | Market (‘000) | Criterion of Realism | Criterion of Realism Decision Alternative | | Good | Fair | Poor |