3-8.Describe how you would determine the best decision using the EMV criterion with a decisiontree.
3-16. Avrat Singh is the principal owner f Murugan Oil, Inc. After quitting his universityteaching job, Avrat has been able to increase his annual salary by a factor of over
. At the present time, Avrat is forced to consider purchasing some more equipment for Murugan Oil because of competition. His alternatives are shown in the following table:Avrat decides that his alternatives are to
Decision making under uncertainty
is an expensive oil newsletter to which many oil giants subscribe, includingAvrat Sing. In the last issue, the letter described how the demand for oil products would beextremely high. Apparently, the American consumer will continue to use oil products even if the price of the Lubricant states threat the chances of a favorable market for oil products was 70%,while the chance of an unfavorable market was only 30%.
Avrat would like to use these probabilities in determining the best decisions
What decision model should be used?
aximizing Probabilities E
What is the optimal decision?
Avrat purchases a Sub
Avrat believes that the $300,000 figures for the Sub 100 with a favorable market are toohigh. How much lower would this figure have to be for Avrat to change his decisionmade in part b? $7143 or lower