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1)For the following problems, calculate: Scenario: The economy is bad and a weak demand is likely
1)For the following problems, calculate:
- Scenario: The economy is bad and a weak demand is likely. Think about, even in this situation, when a large complex should still be built.
p(s1) = 0.3 p(s2) = 0.7
|
|
s1 |
s2 |
EV |
|
d1 |
11 |
10 |
10.3 |
|
d2 |
14 |
6 |
8.4 |
|
P(x) |
0.3 |
0.7 |
|
- Scenario: We are unable to get a prediction of the demand, so we go with 50/50. Think about how close EV(d1) is to EV(d2) and how this influences the problem.
P(s1) = 0.5 p(s2) = 0.5
|
|
s1 |
s2 |
EV |
|
d1 |
5 |
-1 |
2 |
|
d2 |
14 |
-8 |
3 |
|
P(x) |
0.5 |
0.5 |
|
- Scenario: We are unable to get a prediction of demand, so we go with 50/50. Think about the high risk involved with d2.
P(s1) = 0.5 p(s2) = 0.5
|
|
s1 |
s2 |
EV |
|
d1 |
10 |
3 |
6.5 |
|
d2 |
17 |
-10 |
3.5 |
|
P(x) |
0.5 |
0.5 |
|
- Scenario: We are almost certain of a strong demand, with probability 0.9. Think about how this influences the cutoffs.
P(s1) = 0.9 p(s2) = 0.1
|
|
s1 |
s2 |
EV |
|
d1 |
10 |
8 |
9 |
|
d2 |
12 |
-1 |
5.5 |
|
P(x) |
0.9 |
0.1 |
|
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