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The weather forecast is for cold weather, and there is a 50% chance. Which alternative would you suggest the grower take? Why?
Construct a tornado diagram for this problem. On the basis of the tornado diagram, advise your friend regarding either (1) whether to invest.
Build a decision tree and calculate the expected value of continuing the case. What is the probability that Junior Larry will end up with nothing?
What are the keys to getting commitment to action from the decision-board participants in the six-step process?
What kind of people would you try to hire? How would the role of the managers differ from the traditional view of what a manager does?
What corporate objectives would be important for you to consider? What major sources of uncertainty do you face?
Or would you wait until the industry was more mature? What factors would you include when thinking about commercial space travel?
What was your impression of this book before reading the first chapter? Have your beliefs about the value of decision analysis changed?
Many decisions are simple, preprogrammed, or already made. What kinds of decisions are appropriate for a decision-analysis approach?
Describe a decision that you have had to make recently that was difficult. What were the major issues? What were your alternatives?
What are some of the issues that you would consider in making this decision? What are the alternative courses of action?
Is the model more in line with economic theory than static form? Is it adequate for test of over identifying restrictions and second order serial correlations?
Store the estimates from the FE model, and refit the model with RE. Does a houseman test accept RE as the more appropriate estimator?
Explain how modeling is used in decision analysis. What is meant by term requisite decision model? What role do subjective judgments play in decision analysis?
Suppose you are trying to decide where to go for a trip over spring break. What are your fundamental objectives? What are your means objectives?
What risk does the bank face? What role does the credit report play? Using PrecisionTree, create an influence diagram of this situation.
What are your fundamental objectives in the context of renting an apartment while attending college? What are your means objectives?
What are the four decision elements of Vijay's decision? Are there any hedging strategies he can employ to avoid the downside risks?
What are the implications for building a requisite model of the current car-purchase decision if trading in the car is treated as an uncertain event?
Look at this problem from the store manager's perspective. Using the interest rate of 10%, what is the net present value of the loan to the manager?
How would you describe your objectives? What are some alternatives that you might not have considered in the narrower decision context?
What kinds of decisions might a president have to make based on his gut or intuition, and which ones might benefit from careful thought and analysis?
Explain in your own words why it is important to keep track of what information is known and what events are still uncertain for each decision.
What objectives must be considered in the broader context that can be ignored in the narrower one?
What are some of the uncertainties that the investor faces? What are the crucial tradeoffs? What role does the time value of money play for this investor?