problem number 2/a,b,and c

Chapter 13 Decision Analysis 2. Suppose that a decision maker faced with four decision alternative nature develops the following profit payoff table: State of Nature Decision Alternative 10 10 10 da 10 the four states of Mive, and the most appropriate avots. What is the a. If the decision maker knows nothing about the probabilities of the four sta what is the recommended decision using the optimistic, conservative regret approaches? b. Which approach do you prefer? Explain. Is establishing the most proach before analyzing the problem important for the decision maker? c. Assume that the payoff table provides cost rather than profit payoffs. Wh recommended decision using the optimistic, conservative, and minimax regret apo 3. Southland Corporation's decision to produce a new line of recreational products in the need to construct either a small plant or a large plant. The best selection of depends on how the marketplace reacts to the new product line. To conduct ana marketing management has decided to view the possible long-run demand as low dium, or high. The following payoff table shows the projected profit in millions of doll products resulted Plant Size Small Large Low 150 50 Long-Run Demand Medium 200 200 High 200 500 a. What is the decision to be made, and what is the chance event for Southland's problem! b. Construct an influence diagram. c. Construct a decision tree. d. Recommend a decision based on the use of the optimistic, conservative, and minimax regret approaches. 4. Amy Lloyd is interested in leasing a new Honda and has contacted three automobile deal- ers for pricing information. Each dealer offered Amy a closed-end 36-month lease with no down payment due at the time of signing. Each lease includes a monthly charge and a mileage allowance. Additional miles receive a surcharge on a per-mile basis. The mommy lease cost, the mileage allowance, and the cost for additional miles follow: Cost per Additio Dealer Hepburn Honda Midtown Motors Hopkins Automotive Monthly Cost $299 $310 $325 Mileage Allowance 36,000 45,000 54.000 $0.15 $0.20 $0.15 Amy decided to choose the lease option that will minimize her total 36-mont honth cost. The di