Question 13 Consider the following payoff table that represents the profits earned for each alternative (A, B, and C) under the states of nature S1,
Question 13
Consider the following payoff table that represents the profits earned for each alternative (A, B, and C) under the states of nature S1, S2, and S3.
S1 S2 S3
A $60 $145 $120 B $75 $125 $110
C $95 $85 $130
Refer to the payoff table. Using the criterion of realism and an alpha value of 0.7, what would be the highest expected payoff?
a.$98.50
b.$ 119.50
c.$116
d.$ $127
Question 14
1) Consider the following linear programming model:
Max X12 + X2 + 3X3
Subject to:
X1 + X2 ≤ 3
X1 + X2 ≤ 1
X1, X2 ≥ 0
This problem violates which of the following assumptions?
a.proportionality
b.linearity
c.divisibility
d.certainty
Question 15
Consider the following payoff table that represents the profits earned for each alternative (A, B, and C) under the states of nature S1, S2, and S3.
S1 S2 S3
A $60 $145 $120 B $75 $125 $110
C $95 $85 $130
Refer to the payoff table. Using the maximax criterion, what would be the highest expected payoff?
a.$145
b.$120
c.$110
d.$124
Question 16
Consider the following payoff table that represents the profits earned for each alternative (A, B, and C) under the states of nature S1, S2, and S3.
S1 S2 S3
A $60 $145 $120 B $75 $125 $110
C $95 $85 $130
Refer to the payoff table. What is the expected value under certainty? Assume P(S1) = 0.5 and P(S2) = 0.25.
a.$103.33
b.$101.25
c.$108.33
d.$116.25
Question 17
Which of the following models is a picture or drawing of reality?
a.scale model
b.mathematical model
c.physical model
d.schematic model
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