tailieunhanh - Lecture Introduction to Management Science with Spreadsheets: Chapter 11 - Stevenson, Ozgur

Chapter 11 "Decision theory", after completing this chapter, you should be able to: Outline the characteristics of a decision theory approach to decision making; describe and give examples of decisions under certainty, risk, and complete uncertainty; make decisions using maximin, maximax, minimax regret, Hurwicz, equally likely, and expected value criteria and use Excel to solve problems involving these techniques;. | Chapter 11 Decision Theory Part 3 Probabilistic Decision Models Learning Objectives Outline the characteristics of a decision theory approach to decision making. Describe and give examples of decisions under certainty, risk, and complete uncertainty. Make decisions using maximin, maximax, minimax regret, Hurwicz, equally likely, and expected value criteria and use Excel to solve problems involving these techniques. Use Excel to solve decision-making problems under risk using the expected value criterion. After completing this chapter, you should be able to: McGraw-Hill/Irwin 11– Learning Objectives (cont’d) Develop decision trees that consist of a combination of decision alternatives and events. Use TreePlan to develop decision trees with Excel. Determine if acquiring additional information in a decision problem will be worth the cost. Calculate revised probabilities manually and with Excel. Analyze the sensitivity of decisions to probability estimates. Describe how utilities can be used in lieu of monetary value in making decisions. After completing this chapter, you should be able to: McGraw-Hill/Irwin 11– Decision Theory Decision theory problems are characterized by the following: A list of alternatives. A list of possible future states of nature. Payoffs associated with each alternative/state of nature combination. An assessment of the degree of certainty of possible future events. A decision criterion. McGraw-Hill/Irwin 11– Example 11-1 Suppose that a real estate developer must decide on a plan for developing a certain piece of property. After careful consideration, the developer has ruled out “do nothing” and is left with the following list of acceptable alternatives: 1. Residential proposal. 2. Commercial proposal #1. 3. Commercial proposal #2. Suppose that the developer views the possibilities as 1. No shopping center. 2. Medium-sized shopping center. 3. Large shopping center. McGraw-Hill/Irwin 11– Table 11–1 General Format of a Decision . | Chapter 11 Decision Theory Part 3 Probabilistic Decision Models Learning Objectives Outline the characteristics of a decision theory approach to decision making. Describe and give examples of decisions under certainty, risk, and complete uncertainty. Make decisions using maximin, maximax, minimax regret, Hurwicz, equally likely, and expected value criteria and use Excel to solve problems involving these techniques. Use Excel to solve decision-making problems under risk using the expected value criterion. After completing this chapter, you should be able to: McGraw-Hill/Irwin 11– Learning Objectives (cont’d) Develop decision trees that consist of a combination of decision alternatives and events. Use TreePlan to develop decision trees with Excel. Determine if acquiring additional information in a decision problem will be worth the cost. Calculate revised probabilities manually and with Excel. Analyze the sensitivity of decisions to probability estimates. Describe how utilities can