Brandon University is a small university that would like to

Brandon University is a small university that would like to increase revenues by expanding its student base and building ties with businesses in the surrounding area. To do so, it is considering establishing a new graduate program€”an MBA, a masters in computer science, a masters in information technology, a masters in nursing (affiliated with a hospital), or a masters in health-care administration. In addition to generating additional enrollment within a new program, administrators also believe that a new graduate program could increase exposure and visibility for the school and enhance its reputation as a whole, which could also result in increased enrollment and revenue sources. 

The cost to establish and maintain each new program differs according to faculty salaries, facilities, and the support necessary to attract new students, which, in turn, affects revenues.

The degree of success that each new graduate program might achieve is affected by competition from other colleges and uni-versities, and the ability of a program to attract new faculty and students. The following payoff table summarizes the possible gains (i.e., revenues less costs) the college might realize with each new program under different future success scenarios.


Program Success Moderate Graduate Very Unsuccessful Success Successful Successful Program -$316,000 -$57,000 $231,000 $4


Determine the best decision for the university using the follow-ing criteria:
a. Maximax
b. Maximin
c. Equal likelihood
d. Hurwicz (α =.50)
e. If Brandon administrators use the Hurwicz criterion to make their decision, explain what this might mean about their decision-making strategy.
f.  Brandon has estimated probabilities of occurrence for the different states of program success as shown in the following table. What is the best decision using expected value?


Program Success Moderate Graduate Very Unsuccessful Success Successful Successful Program MBA .32 35 .24 .09 Computer Sc

g. Based on these decision analysis results, what would you recommend to Brandon University?



Transcribed Image Text:

Program Success Moderate Graduate Very Unsuccessful Success Successful Successful Program -$316,000 -$57,000 $231,000 $424,000 MBA 375,000 Computer Science -210,000 -35,000 190,000 Information -472,000 -75,000 305,000 517,000 Technology Nursing -135,000 81,000 205,000 307,000 Health 245,000 -75,000 55,000 180,000 Administra- tion Program Success Moderate Graduate Very Unsuccessful Success Successful Successful Program MBA .32 35 .24 .09 Computer Science 38 .41 .16 .05 Information .25 .33 .30 12 Technology Nursing .17 .28 .41 .14 Health .08 .34 .47 .11 Administra- tion

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