Amace Anticipatory Shipping implement? 10 TRUE 100 FALSE Delivery Time Decrease 10 LOW Lad 50 0% 0.0% 0 50.04 Chin Market Kaspona ALOW! BIZ3189 Management Information Systems - Interim Test 2 Low 64 Market Response 44 DOON 200 20.09 20 200 80 0% 20 40.0% 100 10.0% -80 10.04 100 40.0% Page 4 of 5 The result turned out to be 'High' for 'Delivery Time Decrease' and 'Low' for 'Market Response.,' i.e., Amazon lost money by $80 million. As a result, CEO Jeff Bezos is firing the project manager who decided to implement 'Anticipatory Shipping'. If you have a chance to give an advice to Jeff regarding this, what advice would you give to Jeff? Recall the distinction between good outcome and good decision. Q7. (Use the DT above) What is the expected value of perfect information for 'Delivery Time Decrease'? What is the value of control for 'Delivery Time Decrease'? Q8. (Use the DT above) A consulting firm, McKinsey & Company, gives some idea about market response forecasting. Their prediction accuracy about market response is known as 90%. That is, probability that Event A actually occurs given that McKinsey & Company says Event A will occur is 0.9. That is P(A | "A") = 0.9, and P(AC "AC") = 0.9. 1) Draw an influence diagram with the market response forecasting node and its relationship with market response. 2) If you are a CEO of Amazon, what is your maximum willingness to pay (value of imperfect information) for the McKinsey & Company' prediction for market response?

B123189 Management Information Systems - Interim Test 2 Page 4 of 5 The result turned out to be 'High' for 'Delivery Time Decrease' and 'Low' for 'Market Response., i.e., Amazon lost moncy by $80 million. As a result, CEO Jeff Bezos is firing the project manager who decided to implement 'Anticipatory Shipping'. If you have a chance to give an advice to Jeff regarding this, what advice would you give to Jeff? Recall the distinction between good outcome and good decision. Q7. (Use the DT above) What is the expected value of perfect information for 'Delivery Time Decrease'? What is the value of control for 'Delivery Time Decrease'? Q8. (Use the DT above) A consulting firm, McKinscy \& Company, gives some idea about market response forecasting. Their prediction accuracy about market response is known as 90%. That is, probability that Event A actually occurs given that MeKinsey \& Company says Event A will occur is 0.9 . That is P(A"A")=0.9, and P(AC""ACm)=0.9. 1) Draw an influence diagram with the market response forecasting node and its relationship with market response. 2) If you are a CEO of Amazon, what is your maximum willingness to pay (value of imperfect information) for the McKinsey \& Company' prediction for market response