buying shirts from Lucinder). The important factor is choice of criteria for decision making under uncertainty . The five criteria used are namely Laplace‚ pessimism‚ optimism‚ Hurwicz criterion and Savage criterion. The Laplace criterion cannot be applied to this case as probabilities associated with each state of nature is different . As evident from the case facts‚ Lucinder is neither completely optimistic nor completely pessimistic
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Chapter 3: Risk and Uncertainty Add Your Company Slogan L/O/G/O Table of Contents 01. Risk vs. uncertainty Risk vs. uncertainty Sources of uncertainty 03. Click to add sub title - Description of - Description of - Description of - Description of the contents the contents the contents the contents 02. Click to add sub title - Description of - Description of - Description of - Description of the contents the contents the contents the contents 04. Click to add sub title
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choosing the alternative with the "best of the best" is the approach called: A) maximax B) maximin C) Laplace D) minimax regret E) expected monetary value Answer: A Page Ref: 323 Topic: Decision Making Under Uncertainty Difficulty: Moderate 2) Determining the worst payoff for each alternative and choosing the alternative with the "best of the worst" is the approach called: A) maximax B) maximin C) Laplace D) minimax regret E) expected monetary value Answer: B Page Ref: 323 Topic: Decision Making Under
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Decision Theory Models The Six Steps in Decision Theory * Clearly define the problem at hand. * List the possible alternatives. * Identify the possible outcomes or states of nature. * List the payoff or profit of each combination of alternatives and outcomes. * Select one of the mathematical decision theory models. * Apply the model and make your decision. Case Here we use the Thompson Lumber Company case as an example to illustrate these decision theory steps. John Thompson
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strategy c. Using Laplace For the Laplace criterion‚ first find the row totals‚ and then divide each of those amounts by number of states of nature. Thus‚ we have Alternative | Next year’s demand | Row total | Row average | | Low | High | | | Do nothing | 50 | 60 | 110 | 55 | Expand | 20 | 80 | 100 | 50 | Subcontract | 40 | 70 | 110 | 55 | Because the “Do nothing” facility or “Subcontract” facility has the Highest average‚ they would be chosen under the Laplace. d. Using Minnimax
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complex games and to general decision making in the presence of uncertainty. IV. Laplace Criteria If the probabilities of several chance events are unknown‚ they should be assumed equal‚ and the different actions should be judged according to their payoffs averaged over all the states of nature. V. Criterion of Realism Often called weighted average‚ the criterion of realism (or Hurwicz) decision criterion is a compromise between optimistic and a pessimistic decision. VI. Marginal
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DECISION QUIZZES 1. The value of perfect information is directly related to losses predicted with imperfect information. A. True B. False A. True B. False 2. EVPI is the expected financial value of the regret for the optimal decision under risk. A. True B. False A. True B. False 3. A decision tree branches out to include all of the possible decisions and all of the possible events we are capable of identifying. A. True
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How to Create a Decision Tree Edited by Madhva_madhu‚ Leona 0 Article EditDiscuss A decision tree is a kind of flowchart -- a graphical representation of the process for making a decision or a series of decisions. Businesses use them to determine company policy‚ sometimes simply for choosing what policy is‚ other times as a published tool for their employees. Individuals can use decision trees to help them make difficult decisions by reducing them to a series of simpler‚ or less emotionally
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References: Engineering Practice‚ 2-11‚ 2008. Journal of Acoustic Stress and Reliability in Design‚ 111‚ 278-283‚ 1989. pavement surfaces‚ Applied Mathematical Modeling‚ 26‚ 635-652‚ 2002. numerical simulation‚ Proceedings of the Romanian Academy‚ 2003. criterion‚ Journal of Sound and Vibration 301‚ 18-27‚ 2007. 547-560‚ 2001. Electronics‚ 38‚ 217-222‚ 1991. Engineering‚ 163‚ 87–94‚ 1998. [9] Meditch‚ J.S.‚ Stochastic optimal linear estimation and control‚ McGraw-Hill‚ New York‚ 1969. linear and fuzzy-logic
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A4-sheet of personal notes for his/her own use. No stick-ons are allowed on this one sheet of personal notes. PAGE 2 ME2142/ME2142E QUESTION 1 (25 MARKS) (a) Ω( s ) 2 ‚ = V ( s ) (0.01s + 1)(0.1s + 1) where Ω(s ) and V (s ) are the Laplace transforms of the motor speed‚ ω (t ) ‚ and the applied voltage‚ v(t ) ‚ respectively. Determine the time response the motor speed‚ ω (t ) ‚ when the applied input voltage‚ v(t ) ‚ is a unit step. Sketch the response for ω (t ) . (10 marks) The
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