# Question

You want to choose between decision alternatives A1 and A2 in the following decision tree, but you are uncertain about the value of the probability p, so you need to perform sensitivity analysis of p as well.

Your utility function for money (the payoff received) is

(a) For p = 0.25, determine which alternative is optimal in the sense that it maximizes the expected utility of the payoff.

(b) Determine the range of values of the probability p (0 ≤ p ≤ 0.5) for which this same alternative remains optimal.

Your utility function for money (the payoff received) is

(a) For p = 0.25, determine which alternative is optimal in the sense that it maximizes the expected utility of the payoff.

(b) Determine the range of values of the probability p (0 ≤ p ≤ 0.5) for which this same alternative remains optimal.

## Answer to relevant Questions

Reconsider Prob. 16.2-4. Warren Buffy decides that Bayes’ decision rule is his most reliable decision criterion. He believes that 0.1 is just about right as the prior probability of an improving economy, but is quite ...You are given the following payoff table (in units of thousands of dollars) for a decision analysis problem: (a) Which alternative should be chosen under the maximin payoff criterion? (b) Which alternative should be chosen ...Consider the following statements about an M/M/1 queueing system and its utilization factor p. Label each of the statements as true or false, and then justify your answer. (a) The probability that a customer has to wait ...A gas station with only one gas pump employs the following policy: If a customer has to wait, the price is $3.50 per gallon; if she does not have to wait, the price is $4.00 per gallon. Customers arrive according to a ...Consider a generalization of the M/M/1 model where the server needs to “warm up” at the beginning of a busy period, and so serves the first customer of a busy period at a slower rate than other customers. In particular, ...Post your question

0