ASW/QMB-Ch.04 3/8/01 10:35 AM Page 96 Chapter 4 DECISION ANALYSIS CONTENTS 4.1 PROBLEM FORMULATION Influence Diagrams Payoff Tables Decision Trees DECISION MAKING WITHOUT PROBABILITIES Optimistic Approach Conservative Approach Minimax Regret Approach DECISION MAKING WITH PROBABILITIES Expected Value of Perfect Information RISK ANALYSIS AND SENSITIVITY ANALYSIS Risk Analysis Sensitivity Analysis DECISION ANALYSIS WITH SAMPLE INFORMATION An Influence Diagram A Decision Tree Decision Strategy
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MM305 Practice Midterm Exam Unit 1: Basic Statistics Review 1. Outliers defined as being between 1.5*IQR and 3*IQR to the left of Q1 or to the right of Q3 are considered ________. A) weak B) extreme C) mild D) statistically significant 2. What does a negative correlation coefficient indicate? A) When one variable increases‚ the other variable decreases. B) There is a nonlinear relationship between the two variables. C) When one variable increases‚ the other variable increases by a smaller proportion
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MGT 101 Introduction to Management First Semester SY 2013 - 2014 Course Description: Principles & practices of management; an overview of the functional areas of business; an introduction to case problem-solving. Prerequisite: None Credit Units: 3 units Course Objectives: At the end of the course‚ the students are expected to: a. Expound the concepts of organizations and management and the need for sound‚ effective and efficient management; b. Differentiate and describe the various management
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efficiency of sample information conservative approach Bayesian revision minimax regret approach utility opportunity loss or regret lottery expected value approach expected utility expected value of perfect information (EVPI) Solutions: 1. a. b. Decision Maximum Profit Minimum Profit d1 250 25 d2 100 75 Optimistic approach: select d1 Conservative approach: select d2 Regret or opportunity loss table: s1 s2 s3 d1 0 0 50 d2 150 0 0
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ACCA Paper P5 Advanced Performance Management Class Notes December 2012 © Interactive World Wide Ltd‚ December 2011 All rights reserved. No part of this publication may be reproduced‚ stored in a retrieval system‚ or transmitted‚ in any form or by any means‚ electronic‚ mechanical‚ photocopying‚ recording or otherwise‚ without the prior written permission of Interactive World Wide Ltd. 2 www.studyinteractive.org Contents PAGE INTRODUCTION TO THE PAPER FORMULAE & TABLES PROVIDED
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and escalation of commitment. * Explain intuitive decision making. * Contrast programmed and nonprogrammed decisions. The Manager as Decision Maker * Contrast the three decision-making conditions. * Explain maximax‚ maximin‚ and minimax decision choice approaches. * Describe the four decision making styles. * Discuss the twelve decision-making biases managers may exhibit. * Describe how manager can deal with the negative effects of decision errors
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Question 12: What is the rationale behind the minimax regret rule? What are some of the less formal and precise methods of dealing with uncertainty? When are these useful? The minimax regret rule is a strategy usually used by risk neutral management. The goal of this strategy is to minimize the maximum possible regret that would be incurred as a result of making the wrong decision. When using the strategy‚ management would select the option with the lowest regret‚ also called opportunity cost‚ based on
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Rawls believes it is in the participants best interest to use maximin reasoning‚ how the maximin works is by “compare alternatives by the worst possible outcome under each alternative‚ and we should choose one which maximize the utility of the worst outcome.” (http://tiseda.sakura.ne.jp/works/maximin.html) Rawls believes his two principles of justice work as it makes all in society cooperate‚ according to the maximin rule the society should be designed in a way as to maximise the position
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Decisions a- Decisions whether b- Decisions which c- Contingent decisions 3) The Decision Environment Approaches to Decision Making a- Authoritarian b- Group 4) 5) Some Decision Making Strategies a- Optimizing b- Satisficing c- Maximax d- Maximin II- Decision Making Procedure and techniques 1) Basic guidelines to decision making and problem solving 2) Decision making techniques a- Pareto Analysis b- Paired Comparison Analysis c- Grid Analysis d- PMI e-
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3 2. John Rawls: A Life Sketch 4 3. The Original Position 6 4. The Original Position and the Social Contract 7 5. Nature of the Original Position 9 6. The veil of ignorance 11 7. Rationality in the original position 13 8. The maximin principle 15 9. The original position and utilitarianism 17 10. Criticism of the original position 19 11. Conclusion 21 12. References 22 13. Bibliography 23 INTRODUCTION John Rawls was arguably the most widely discussed
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