DECISION ANALYSIS COURSE

AutoSave OFF DEF ABU a Home Insert Draw Design Layout References Mailings Review View Table Design Layout Tell me Share Comments Calibri (Bo.. v 10 - A Aa A Aa Bb GDCE: AaBbcodes AABBCODD AaBb CcDdi AABBCCDDE LG AaBbCcDdE YUH-1 Past B I Normal = = YU Body YU H-1 YU --2 x M. H-3 Dictate Styles Pane Sensitivity Question 10 Pittsburgh Development Corporation (PDC) purchased land that will be the site of a new luxury condominium complex. PDC commissioned preliminary architectural drawings for three different projects: one with 30, one with 60, and one with 90 condominiums. The financial success of the project depends upon the size of the condominium complex and the chance event concerning the demand for the condominiums. The statement of the PDC decision problem is to select the size of the new complex that will lead to the largest profit given the uncertainty concerning the demand for the condominiums. Consider the following problem with three decision alternatives and two states of nature with the following payoff table representing profits: Decision Allam Small complex, 4 Mediurn complex, Large complexos Sisles of Nature Strong Dermand Weak Derrand 8. 8, 8 7 14 5 20 Thus, determine the better decision for this situation based on the three commonly used criteria for decision making when probability information regarding the likelihood of the states of nature is unavailable: A) the optimistic approach B) the conservative approach C) if the probability of the states of nature is known (s1 = 80% and s2 = 20%), is your decision being different? Pagn of 10 1017 words English (United States) Focus + 150%