Universidad Nacional Abierta y a Distancia

Vicerrectoría Académica y de Investigación

Course: Decisions Theory
Code: 212066

Activity Guide and Evaluation Rubric – Task 1 Decisions under uncertainty

1. Activity Description

Type of activity: Collaborative

Evaluation moment: Intermediate Unit 1
Highest score of the activity: 120 points
The activity starts on: Thursday, The activity ends on: Friday, March 22,
February 22, 2024 2024
With this activity, you are expected to achieve the following learning
outcomes:

Learning Outcome 1: Solve deterministic decision problems through hierarchical

analytical models and game theory in production, logistics and service systems.
The activity consists of:

Below you will find 5 exercises, the first two on decision criteria under uncertainty,
benefits and costs, and the following three on game theory, two-person zero sum and
(2xn) and (mx2) games, which you must develop and present in the discussion
forum of task 1, and submit collaboratively in the assessment environment.

In the Learning environment, consult the bibliographic reference of unit 1.

Optimization models under uncertainties:

• Adhwarjee, D. (2021). Theory and Applications of Operations Research

(pp.144-147). Laxmi Publications Pvt Ltd.

• Adhwarjee, D. (2021). Theory and Applications of Operations Research

(pp.159-162). Laxmi Publications Pvt Ltd.

• López, A. (2022). Decisions Under Uncertainty [OVI].

• Prisner, E. (2014). Game Theory: Through Examples (pp-199-206).

Mathematical Association of America.

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In the Exercises 1 and 2, the student must solve the proponed questions by Criteria
of Laplace, Wald or pessimistic, optimistic, Hurwicz and Savage to determine the
decision process. Consider the nature of the problems.

Exercise 1. Laplace, Wald or pessimistic, optimistic, Hurwicz and Savage

criteria (Profit Matrix)

Optimal solution for choosing a production process: A deodorant manufacturer

is about to expand production capacity to manufacture a new product. It has four
alternative production processes. Table 1 in Annex 1 shows the estimated benefits, in
dollars, of these processes corresponding to three possible levels of product demand.

Download in the Annex 1. Decision Theory Course Assignment Data (download,

do not preview) and follow the instructions.

According to the data of the annex 1 – Exercise 1, applying:

• Laplace criterion
• Wald – pessimistic criterion
• Optimistic criterion
• Hurwicz criterion
• Savage criterion
• Analyze the solutions alternatives to give a conclusion according to the
productive system that it refers.

Exercise 2. Laplace, Wald or pessimistic, optimistic, Hurwicz and Savage

criteria (Cost Matrix)

Optimal decision for managing operation: Samsonito corporation considers three

options for managing its data processing operation: continuing with its own staff,
hiring an outside vendor to handle the administration (known as outsourcing), or
using a combination of its own staff and an outside vendor. The cost of the operation
depends on future demand. The annual cost of each option (in thousands of dollars)
depends on demand and is shown in Annex 1.

Download Annex 1. Decision Theory Course Assignment Data (download, do not

preview) and follow the instructions.

According to the data of the annex 1 – Exercise 2, applying:

• Laplace criterion
• Wald – pessimistic criterion

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 • Optimistic criterion
• Hurwicz criterion
• Savage criterion
• Analyze the solutions alternatives to give a conclusion according to the
productive system that it refers.

Exercise 3. Two-Person Zero-Sum Games

Optimal decision for market share: Two companies are competing for market
share in the soft drink market. Each worked with an advertising agency to develop
alternate advertising strategies for the coming year. A variety of television
commercials, product promotions, in-store displays, etc., provides four different
strategies for each company. The table you find in annex 1 summarizes the projected
change in market share for Company A once the two companies select their
advertising strategy for the coming year.

Download Annex 1. Decision Theory Course Assignment Data (download, do not

preview) and follow the instructions.

• Finding the value of the zero-sum two-person game using the Maximin -
Minimax strategy for the market share
• Using excel, formulate as a Linear Programming Problem via Excel Solver Add-
in and analyze the saddle point of the given situation.
• Finding the probabilities of the game and determinate the value of Zero-Sum
Two-Person Game.
• Interpret the results of the game value and indicate which alternatives each
company should use according to the conditions of the problem.

Exercise 4. Game Theory method (game 2xn):

Game Value for political campaign: Two politicians are about to start their
campaigns and are competing for the same position. Each must choose the main
issue he will emphasize in the work program. Politician 1 agrees on two
advantageous issues with politician 2 who has 3 issues to choose from, but his
relative effectiveness will depend on the one selected by his opponent.
In particular, the estimated increase in the number of votes for politician 1
(expressed as a percentage of the total vote) resulting from each combination of
issues is shown in the table 1:

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Table 1. Increase in the number of votes.

Strategy politician 2
Topic 1 Topic 2 Topic 3
Politician 1 Topic 1 7 -1 3
Topic 2 -5 2 -1
Note: Table 1 shows the estimated increase in the number of votes for politician 1
(expressed as a percentage of the total vote) with respect to the votes for politician
2.
• Check if the game has a pure strategy solution using the maximin-minimax
criterion.
• Determine the optimal solution of the game for the two players through the
graphical method, indicate the value of the game and the probabilities for each
strategy of each politician. Use the Geogebra tool for graphs (Annex 2).
• Interpret the results of the game value and the strategies of each player for
decision making according to the conditions of the problem.

Exercise 5. Game Theory method (Game mx2):

Game Value for market strategy: Suppose that two companies are the only
manufacturers of a particular product and compete with each other for market share.
In planning a market strategy for the coming year, each company considers
strategies designed to gain market share from its competitor, the data are shown in
Table 2.

Table 2. Data for market share.

Company 2
Strategy Extend Increase
warranty publicity
Extend 18 14
warranty
Company 1
Increase 12 16
publicity
Quantity 17 15
discounts
Note: Table 2 shows the market shares gained by company 1 and the market shares
lost by company 2 are presented according to the strategies they decide to use.

• Check if the game has a pure strategy solution using the maximin-minimax
criterion.
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 • Determine the optimal solution of the game for the two players through the
graphical method, indicate the value of the game and the probabilities for each
strategy of each company. Use the Geogebra tool for graphs (Annex 2).
• Interpret the results of the game value and the strategies of each player for
decision making according to the conditions of the problem.
For the development of the activity consider that:

In the Initial Information Environment, you must:

• Constantly review the course agenda (verify the start and end dates of the
activity).
• Check the synchronous attention schedules via skype.
• Consult the classroom news forum of the course.
• Review the course presentation.
• Consult the Synchronous Meetings page via web conference.

In the Learning Environment, you must: Consult the reference proposed in the
required educational resources of unit 1. Optimization models under uncertainty.
Submit in a timely manner in the discussion forum of the course, the contributions
and advances in the development and solution of the problems.

In the Evaluation Environment, you must: Deliver the group report according to its
specifications and availability scheduled in the course agenda.
Evidence of individual work:
The individual evidence to be submitted is:
Present in the Discussion forum - Task 1 (learning environment) in an individual and
timely manner, a spreadsheet document (excel) with the development of:

Exercises 1, and 2. Laplace, Wald or pessimistic, optimistic, Hurwicz and

Savage criteria:
• Formulation of the problem as a model of Laplace, Wald or pessimistic,
optimistic, Hurwicz and Savage criteria.
• Solution of the model and formulation Laplace, Wald or pessimistic, optimistic,
Hurwicz and Savage criteria according to the conditions of each problem in
spreadsheet.
• Interpretation of results of the model solution for decision making.

Exercise 3. Two-Person Zero-Sum Games

• Finding the value of the zero-sum two-person game using the Maximin -
Minimax strategy for the market share.

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 • Using excel, formulate as a Linear Programming Problem via Excel Solver Add-
in and analyze the saddle point of the given situation.
• Finding the probabilities of the game and determinate the value of Zero-Sum
Two-Person Game.
• Interpret the results of the game value and indicate which city each candidate
should visit according to the conditions of the problem.

Exercises 4 and 5. Game Theory method:

• Check if the game has a pure strategy solution using the maximin-minimax
criterion.
• Determine the optimal solution of the game for the two players through the
graphical method, indicate the value of the game and the probabilities for each
strategy of each player. Use the Geogebra tool for graphs (Annex 2).
• Interpret the results of the game value and the strategies of each player for
decision making according to the conditions of the problem.
Evidence of collaborative work:
The collaborative evidence to be submitted is:
Collaboratively, the working group must select exercise 1, exercise 2, exercise 3,
exercise 4 and exercise 5 within the exercises presented individually to review the
procedure and the application of the models and algorithms. Construct a spreadsheet
document (Excel) consolidated by the members of the group that participated in the
forum, entitled Resolution of problems under uncertainty models, present it in the
Discussion Forum - Task 1 (learning environment) and deliver it in a collaborative in
the evaluation environment, in an which must contain the following information and
presentation:

Cover: Identifying the activity, the title, the authors, the tutor, the course, the
institution, the school, the program and the year.

Exercises 1, and 2. Laplace, Wald or pessimistic, optimistic, Hurwicz and

Savage criteria:
• Formulation of the problem as a model of Laplace, Wald or pessimistic,
optimistic, Hurwicz and Savage criteria.
• Solution of the model and formulation Laplace, Wald or pessimistic, optimistic,
Hurwicz and Savage criteria according to the conditions of each problem in
spreadsheet.
• Interpretation of results of the model solution for decision making.

Exercise 3. Two-Person Zero-Sum Games

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 • Finding the value of the zero-sum two-person game using the Maximin -
Minimax strategy for the market share.
• Using excel, formulate as a Linear Programming Problem via Excel Solver Add-
in and analyze the saddle point of the given situation.
• Finding the probabilities of the game and determinate the value of Zero-Sum
Two-Person Game.
• Interpret the results of the game value and indicate which city each candidate
should visit according to the conditions of the problem.

Exercises 4 and 5. Game Theory method:

• Check if the game has a pure strategy solution using the maximin-minimax
criterion.
• Determine the optimal solution of the game for the two players through the
graphical method, indicate the value of the game and the probabilities for each
strategy of each player. Use the Geogebra tool for graphs (Annex 2).
• Interpret the results of the game value and the strategies of each player for
decision making according to the conditions of the problem.

Bibliography (with APA standard).

File Extension: .xls (excel)
Identification: Task 1_Number of group

2. General Guidelines for the Development of Evidences to Submit

For Collaborative evidences, consider the following:

• All members of the group must participate with their contributions in the
development of the activity.

• In each group a single member will be chosen to submit the requested product in
the environment indicated by the teacher.

• Before submitting the requested product, students should check that it meets all
the requirements mentioned in this activity guide.

• Only the members of the group that participated with contributions during the
time assigned for the activity should be included as authors of the submitted
product.

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Please keep in mind that all individual or collaborative written products must comply
with the spelling rules and presentation conditions defined in this activity guide.
Regarding the use of references, consider that the product of this activity must
comply with APA style.
In any case, make sure you comply with the rules and avoid academic plagiarism.
You can review your written products using the Turnitin tool found in the virtual
campus.

Under the Academic Code of Conduct, the actions that infringe the academic order,
among others, are the following: paragraph e) Plagiarism is to present as your own
work all or part of a written report, task or document of invention carried out by
another person. It also implies the use of citations or lack of references, or it
includes citations where there is no match between these and the reference and
paragraph f) To reproduce, or copy for profit, educational resources or results of
research products, which have rights reserved for the University. (Agreement 029 -
December 13, 2013, article 99)

The academic penalties students will face are:

a) In case of academic fraud demonstrated in the academic work or evaluation, the
score obtained will be zero (0.0) without any disciplinary measures being derived.
b) In case of proven plagiarism in academic work of any nature, the score obtained
will be zero (0.0), without any disciplinary measures being derived.

3. Evaluation Rubric Template

Type of activity: Collaborative

Evaluation moment: Intermediate Unit 1
The highest score in this activity is 120 points
First evaluation High level: The student presents significant contributions in
criterion: the forum for the development of the proposed activities, in a
timely manner and contributes to the collective construction of
Use the discussion the final report.
forum, presenting If your work is at this level, you can get between 10
the development of points and 15 points
the exercises
proposed in the Average level: The student presents partial contributions in
guide the forum for the development of the proposed activities but
This criterion does not do so on time and/or does not contribute to the
represents 15 collective construction of the final report.
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points of the total If your work is at this level, you can get between 2
of 120 points of points and 9 points
the activity.
Low level: The student does not present contributions in the
forum for the development of the proposed activities, and/or
does so late.
If your work is at this level, you can get between 0
points and 1 point
Second evaluation High level: The student applies and analyzes the criteria of
criterion: Laplace, Wald or pessimistic, optimistic, Hurwicz and Savage to
Use the Laplace, find the best alternative of problem 1, correctly determining all
Wald or pessimistic, the requested aspects.
optimistic, Hurwicz If your work is at this level, you can get between 15
and Savage criteria points and 20 points
to find the best
alternative to Average level: The student applies and partially analyzes the
problem 1, criteria of Laplace, Wald or pessimistic, optimistic, Hurwicz and
considering its Savage to find the best alternative of problem 1, partially
nature, in order to determining all the requested aspects.
make decisions in a
If your work is at this level, you can get between 2
production, logistics
points and 14 points
and service systems.
This criterion
Low level: The student does not apply or analyze the
represents 20
Laplace, Wald, or Pessimist, Optimist, Hurwicz, and Savage
points of the total
criteria to find the best alternative to Problem 1.
of 120 points of
If your work is at this level, you can get between 0
the activity.
points and 1 point.
Third evaluation High level: The student applies and analyzes the criteria of
criterion: Laplace, Wald or pessimistic, optimistic, Hurwicz and Savage to
Use the Laplace, find the best alternative of problem 2, correctly determining all
Wald or pessimistic, the requested aspects.
optimistic, Hurwicz If your work is at this level, you can get between 15
and Savage criteria
points and 20 points
to find the best
alternative to
Average level: The student applies and partially analyzes the
problem 2,
criteria of Laplace, Wald or pessimistic, optimistic, Hurwicz and
considering its
nature, in order to Savage to find the best alternative of problem 2, partially
make decisions in determining all the requested aspects.
order to make If your work is at this level, you can get between 2
decisions in a points and 14 points

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production, logistics
and service systems Low level: The student does not apply or analyze the
This criterion Laplace, Wald, or Pessimist, Optimist, Hurwicz, and Savage
represents 20 criteria to find the best alternative to Problem 2.
points of the total If your work is at this level, you can get between 0
of 120 points of points and 1 point.
the activity.
Fourth evaluation High level: The student applies and analyzes the method of
criterion: game theory to determine a zero-sum fair game for two people
according to its nature, correctly determining all the requested
Use the game aspects.
theory method to If your work is at this level, you can get between 11
determine a fair points and 15 points
zero-sum game for
two people. Average level: The student applies and partially analyzes the
method of game theory to determine a zero-sum fair game for
This criterion two people according to its nature, partially determining all the
represents 15 requested aspects.
points of the total If your work is at this level, you can get between 2
of 120 points of points and 10 points
the activity.
Low level: The student does not apply or analyze the method
of game theory to determine a zero-sum fair game for two
people according to its nature.
If your work is at this level, you can get between 0
points and 1 point.
Fifth evaluation High level: The student applies and analyzes the graphic
criterion: method to determine the optimal solution of the game for the
two players and interprets the results of the model for decision
Use the graphical making, correctly determining all the requested aspects.
method to If your work is at this level, you can get between 15
determine the points and 20 points
optimal solution of
the game for the Average level: The student applies and partially analyzes the
two players and graphic method to determine the optimal solution of the game
interprets the for the two players and interprets the results of the model for
results of the model decision making, partially determining all the requested
for decision making. aspects.
This criterion If your work is at this level, you can get between 2
represents 20 points and 14 points

10
points of the total
of 120 points of Low level: The student does not apply or analyzes the
the activity. graphic method to determine the optimal solution of the game
for the two players and interprets the results of the model for
decision making, correctly determining all the requested
aspects.

If your work is at this level, you can get between 0

points and 1 point.
Sixth evaluation High level: The student applies and analyzes the graphic
criterion: method to determine the optimal solution of the game for the
two players and interprets the results of the model for decision
Use the graphical making, correctly determining all the requested aspects.
method to
determine the If your work is at this level, you can get between 15
optimal solution of points and 20 points.
the game for the
two players and Average level: The student applies and partially analyzes the
interprets the graphic method to determine the optimal solution of the game
results of the model for the two players and interprets the results of the model for
for decision making. decision making, partially determining all the requested
aspects.
This criterion If your work is at this level, you can get between 2
represents 20 points and 14 points.
points of the total
of 120 points of Low level: The student does not apply or analyzes the
the activity. graphic method to determine the optimal solution of the game
for the two players and interprets the results of the model for
decision making, correctly determining all the requested
aspects.

If your work is at this level, you can get between 0

points and 1 point.
Seventh High level: The student contributes and presents in group the
evaluation academic product with the approach, development, solution
criterion: and interpretation of correct results of the Exercises of Task 1,
with excellent writing, spelling, citations and bibliographic
Group report on references according to the APA standard in its contents.
decision methods If your work is at this level, you can get between 8
points and 10 points.

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under uncertainty
and game theory. Average level: The student contributes and presents partially
This criterion in group the product academic with the approach,
represents 10 development, solution and interpretation of the results of the
points of the total Exercises of Task 1, with regular writing, spelling, citations,
of 120 points of and bibliographical references according to the APA standard in
the activity. its contents.
If your work is at this level, you can get between 2
points and 7 points.

Low level: Student does not contribute and does not deliver
the academic product of group task 1.
If your work is at this level, you can get between 0
points and 1 point.

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