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3.-Chap-3 Assignment DTUT

This document provides instructions for a quantitative methods assignment. It outlines 10 key points for students to follow, including that process is more important than results, assignments are due next week with potential point deductions for lateness, handwriting is required, and students can work individually or in groups of two. The document then presents two decision-making scenarios for students to analyze involving risk and uncertainty for a canteen business and startup cosmetics shop. Students are asked to create decision trees and payoff tables, and make recommendations based on criteria like expected monetary value and minimizing regret.

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Thanh Le
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339 views2 pages

3.-Chap-3 Assignment DTUT

This document provides instructions for a quantitative methods assignment. It outlines 10 key points for students to follow, including that process is more important than results, assignments are due next week with potential point deductions for lateness, handwriting is required, and students can work individually or in groups of two. The document then presents two decision-making scenarios for students to analyze involving risk and uncertainty for a canteen business and startup cosmetics shop. Students are asked to create decision trees and payoff tables, and make recommendations based on criteria like expected monetary value and minimizing regret.

Uploaded by

Thanh Le
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Quantitative Methods for Business_ Ms.

Dang Thi Uyen Thao 1

Please read the following instructions carefully before working on the assignment

• PROCESS IS MORE IMPORTANT THAN RESULT


• There is a 10-extra-point-worth question in each chapter, so you may get 110 points at the
maximum
• Assignment is due on the following class next week, late submission will be deducted 10
points per day
• Handwriting is required
• Work in groups of two, and individuals may work alone if they wish to do so
• Let yourself struggle with problems for a while before looking up the answer using other
resources. What you turn in should reflect your own understanding of the assignment but
not the capability of copying from a solution manual. A copied answer is considered
plagiarism and is marked zero with no excuse.
• Please attach the information below on the top of the submitted answer paper. The scale
for Contribution is from 1 to 5, in which 1 describes minimum and 5 describes maximum
commitment.

QUANTITATIVE METHODS FOR BUSINESS


Ms. Dang Thi Uyen Thao
INDIVIDUAL/PAIR ASSIGNMENT CHAPTER 3
dd/mm/yy

Full name & ID Contribution

Tasks and Questions

DECISION MAKING UNDER UNCERTAINTY AND RISK .

HDViet runs a canteen that provide food for students of IU and other nearby universities. A new
dish of Spring rolls is sold for $10 and costs $8 to prepare. At present HDViet must decided in
advance how many dishs to prepare each day (40, 50, 60 or 70). Actual demand will also be 40,
50, 60 or 70 each day. Please support HDViet to
DEMAND

SUPPLY
Quantitative Methods for Business_ Ms. Dang Thi Uyen Thao 2

1. Conduct the payoff table (sample format provided above)


2. What decision would HDViet make if they were extremely optimistic?
3. What decision would HDViet make if they were extremely cautious?
4. What decision would HDViet make if they were risk neutral?
5. (10 points) Given HDViet is in a middle ground between the extremes posed by the
optimist and pessimist criteria, and they are found to be more adventurous over cautious.
What range should the coefficient of realism assigned in this case? Explain
6. An IU staff who knows about the situation advises HDViet to use the coefficient of realism
of 0.8. What decision do you recommend?
7. What decision do you recommend applying the minimax regret?
8. Given the probability of the demand of 40, 50, 60 and 70 each day is 10%, 20%, 40% and
30%, respectively. What do you recommend?
9. Suppose a new ordering system is being considered, whereby students are advised to order
their dishes online the day before. With this new system HDViet may predict the daily
demand 24 hours in advance. They can adjust production levels on a daily basis. How much
should this system worth to HDViet?

DECISION TREE .

A group of IU students is considering the startup of a cosmetic shop. In the favorable market, the
cosmetic demand is high, and this group could earn a net profit of $120,000. If the cosmetic market
is not favorable, they could lose $60,000. There’ll be no cost incurred if they decide not to startup
or just delay the process because the midterm is coming soon.
1. In the case that there is no available information about industry data, it is supposed to have
50–50 chance cosmetic shop will be successful.
Draw a decision tree to help analyze this problem.
What should IU students do?
2. The group is advised to approach a market research company that offers industry data at a
fee of $5,000. Based on experiences gained in this field and historical data record, the
researchers make the following quotes on probability. The probability of a favorable
market happens given a favorable study is 0.85. The probability of a favorable market given
an unfavorable study is 0.15. The probability of a favorable research study is 0.65
Develop a new decision tree to reflect the options with the market study available.
What do you recommend using EMV?

_____ THE END _____

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