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The two problems listed below are from Chapter 6 i...

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The two problems listed below are from Chapter 6 in the textbook called, "Data Analysis and Decision Making" fourth edition by Albright, Winston, and Zappe. There are two problems in this assignment: Chapter 6: 41, 42. In preparation for this assignment, please study example 6.1 in the text. For these problems, I did not find it useful to use range names. My displayed formulae therefore refer to cell addresses, with $ addressing wherever appropriate. Please do Ch. 6: 41, 42. We have not covered decision trees yet, so just build the payoff matrix model in each case. When you have a large number of payoffs to compute using the same model, it can save time to develop formulae which can be copied, including using absolute addressing where appropriate. This is worthwhile in problem 42. In displayed comment boxes or textboxes, show one or two typical formulae used to compute the payoffs. To enable the interpretation of formulae, your model needs to display row and column headings. As we have discussed, this is easy using the Snipping tool. Please don?t embed your written answers in your worksheet; type them in the Word document. For both problems, compute a regret (opportunity loss) matrix. For problem 42 only, apply the following decision criteria: maximin (pessimist?s criterion), minimax regret (doesn?t use probabilities), EMV and EOL. We discussed the two regret-based criteria in class, and they are described in problems 9 and 10 in the chapter. Write a sentence stating the optimal solution for each of the 4 criteria. The statement should contain the recommended strategy and the value of the payoff. Hint for 41: Your payoff matrix should have six strategies and nine states of nature. Hint for 42: The optimal EMV solution is to order 700 pairs. I have attached an excel file of a similar problem. The concept behind these problems are not that difficult. What I'm having difficulty with is primarily calculating the payoff balances. These instructions were a little confusing to me so please feel free to ask me any questions. I will do my best answer them as soon as I can. Thanks.

 

Paper#13089 | Written in 18-Jul-2015

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