Decision Making under Uncertainty and Optimization

(DMUO)
HOMEWORK ASSIGNMENT 1

Submitted by
Section D

Question 1

Question 2
a. EMV 1: 50000*0.6+(-40000)*0.4 = 14000 (Best)
EMV 2: 30000*0.6+(-20000)*0.4 = 10000
EMV 3: 0
b. Equally Likely: Alternative 1= 50000-40000/2= 5000
Alternative 2= 30000-20000/2=5000
Alternative 3= 0
So any of the Robots can be purchased
Maximax: Alternative 1
Minimax: Alternative 3
Hurwicz: Alternative 1= 50000*0.7 - 40000*0.3 = 25000 (Best)
Alternative 2= 30000*0.7 - 20000*0.3 = 15000
Alternative 3= 0
c.

d.

e.
Positive
Survey

Prior Prob

Cond. Prob

Joint Prob

Favourable

0.6

0.9

0.54

Unfavourable

0.4

0.2

0.08
0.62

Negative
Survey

Prior Prob

Cond. Prob

Joint Prob

Favourable

0.6

0.1

0.06

Unfavourable

0.4

0.8

0.32
0.38

f.

Post.
Prob
0.87096
8
0.12903
2
Post.
Prob
0.15789
5
0.84210
5

Question 3.

Max

-15

EMV
EVwPI
-9.6
EVPI
5.4
EVwSI
-13.56
EVSI
1.44
Efficiency 0.266667
Question 4.

Case 1: Starting Right

Case 2: Toledo Leather Company

Case 3: Drink at Home

Case 4: Biales Waste Disposal

Case: Blake Electronics