Brandon University is a small university that would like to increase revenues by expanding its student base
Question:
The cost to establish and maintain each new program differs according to faculty salaries, facilities, and the support necessary to attract new students, which, in turn, affects revenues.
The degree of success that each new graduate program might achieve is affected by competition from other colleges and uni-versities, and the ability of a program to attract new faculty and students. The following payoff table summarizes the possible gains (i.e., revenues less costs) the college might realize with each new program under different future success scenarios.
Determine the best decision for the university using the follow-ing criteria:
a. Maximax
b. Maximin
c. Equal likelihood
d. Hurwicz (α =.50)
e. If Brandon administrators use the Hurwicz criterion to make their decision, explain what this might mean about their decision-making strategy.
f. Brandon has estimated probabilities of occurrence for the different states of program success as shown in the following table. What is the best decision using expected value?
g. Based on these decision analysis results, what would you recommend to Brandon University?
Step by Step Answer:
Operations Management Creating Value Along the Supply Chain
ISBN: 978-1118301173
1st Canadian Edition
Authors: Roberta S. Russell, Bernard W. Taylor, Ignacio Castillo, Navneet Vidyarthi