Escolar Documentos
Profissional Documentos
Cultura Documentos
4-1
Introduction
Decision trees enable one to look at decisions: with many alternatives and states of nature which must be made in sequence
4-2
Decision Trees
A graphical representation where:
4-3
Favorable Market
Unfavorable Market
4-4
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4-6
Acquire data
4-8
4-9
4-10
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Existing data
Need to be able to revise probabilities based upon new data
Bayes Theorem Prior probabilities New data Posterior probabilities
4-13
Market Survey Reliability in Predicting Actual States of Nature Actual States of Nature Result of Survey
Positive (predicts favorable market for product) Negative (predicts unfavorable market for product)
4-14
UM
0.10
0.45
4-15
UM
0.80
* 0.50
0.55
To accompany Quantitative Analysis for Management, 8e by Render/Stair/Hanna
4-16
p=
$37,000
$104,000
= 0.36
4-17
4-18