Assignment 7 Rubric (70 points) Page 813 Problem 9 (30 points) This problem consists of parts a-e. For each part provide the corresponding payoff matrix (5 of them, 3 points each) and clearly indicate the decision (5 decisions, 3 points each). Problem 10 (28 points) For this problem refer to the Assignment 7 Problem 10 Excel file posted in the Week 7 folder. a) Complete the worksheet a) Cond. Prob. as explained on page 792 of the book. (6 points) b) Provide the EMV of the optimal decision without the consultants assistance. (6 points). c) This part requires the construction of a decision tree to analyze the decision problem if the consultant is hired. The template of this decision three is provided in the worksheet Tree diagram. The inputs needed are highlighted with different colors and these include the conditional probabilities from part a, the payoffs from problem 9 and the probabilities that the consultant forecasts low, medium and high demands. Once you complete the tree diagram with these numbers, it will automatically provide the EMV with the consultant's assistance (part d). You do not need any additional software to complete this assignment. (6 points). d) Provide the EMV with the consultant's assistance from part c). (5 points). e) Provide the maximum price Morley should be willing to pay the consultant. (5 points) Problem 11 (12 points) a) Provide the payoff matrix showing utility values (6 points). b) Provide the decision with the largest expected utility (6 points).

	Joint Probabilities
Forecasted Demand		Actual Demand
	Low	Medium	High
Low	0.1600	0.0300	0.0100
Medium	0.0350	0.2800	0.0350
High	0.0225	0.0450	0.3825
Conditional Probabilities For	Given Forecasted Demands
	Actual Demand
Forecasted Demand	Low	Medium	High
Low
Medium
High

Tree Diagram