Given the decision tree below for a two-stage (decision) project to enter a joint venture, find the best alternatives (among a1-a6 in the figure) and their expected values. The outcomes shown are revenues and the investment expenses are in parentheses. Node 4 represents the situation where alternative a1 was chosen, and then the top outcome with a 70% probability occurred; note that there is no choice of alternative if the 30% probability outcome occurred. Similarly with Node5.
Answer to relevant QuestionsMedidata Inc. has identified three risk opportunities for their new medical database project. One is an opportunity to extend the database to include doctors as well as hospitals. This has a probability of a 3 and an impact ...How might you determine if cost estimates are biased?What are some potential problems with the top-down and bottom-up budgeting processes? What are some ways of dealing with these potential problems?Recent design-to-cost interplanetary projects have also had some spectacular failures. Is this the natural result of this new philosophy?Using the cost estimation template and Actuals in Figure 7-5, compare the model in the figure with the following estimates derived from a multiplicative model. Base your comparison on the mean bias, the MAR, and the tracking ...
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