Decision Theory
LEARNING OBJECTIVES SUPPLEMENT OUTLINE 5S.5 Decision Making under Uncertainty, 219
After completing this supplement, you 5S.6 Decision Making under Risk, 220 5S.1 Introduction, 216
should be able to: 5S.7 Decision Trees, 2215S.2 The Decision Process and Causes of
L05S.1 Outline the steps in the decision Poor Decisions, 217 5S.8 Expected Value of Perfect
process. Information, 2235S.3 Decision Environments, 218
L05S.2 Name some causes of poor 5S.9 Sensitivity Analysis, 224
decisions. 5S.4 Decision Making under Certainty, 218
L05S.3 Describe and use techniques that
apply to decision making under
uncertainty.
L05S.4 Describe and use the expected-
value approach.
L05S.5 Construct a decision tree and use
it to analyze a problem.
L05S.6 Compute the expected value of
perfect information.
L05S.7 Conduct sensitivity analysis on a
simple decision problem.
55.1 INTRODUCTION
-
Decision theory represents a general approach to decision making. It is suitable for a wide
range of operations management decisions. Among them are capacity planning, product and
service design, equipment selection, and location planning. Decisions that lend themselves to
a decision theory approach tend to be characterized by the following elements:
1. A set of possible future conditions that will have a bearing on the results of the decision.
2. A list of alternatives for the manager to choose from.
3. A known payoff for each alternative under each possible future condition.
To use this approach, a decision maker would employ this process:
1. Identify the possible future conditions (e.g., demand will be low, medium, or high; the
competitor will or will not introduce a new product). These are called states of nature.
2. Develop a list of possible alternatives, one of which may be to do nothing.
t
3. Determine or estimate the payoff associated with each alternative for every possible
future condition.
---- ----------------------------------------~--
216
217 Supplement to Chapter Five Decision Theory
If possible, estimate the likelihood of each possible future condition.
5. Evaluate alternatives according to some decision criterion (e.g., maximize expected
profit), and select the best alternative.
The information for a decision is often summarized in a payoff table, which shows the
expected payoffs for each alternative under the various possible states of nature. These tables
are helpful in choosing among alternatives because they facilitate comparison of alternatives.
Consider the following payoff table, which illustrates a capacity planning problem.
POSSIBLE FUTURE DEMAND
Alternatives Low Moderate High
Small facility $10* $10 $10
Medium facility 7 12 12
Large facil ity (4) 2 16
'Present value in $ millions.
The payoffs are shown in the body of the table. In this instance, the payoffs are in terms
of present values, which represent equivalent current dollar values of expected future income.
This document outlines key concepts in decision theory. It begins by listing the learning objectives, which are to outline the decision process, describe causes of poor decisions, and techniques for decision making under uncertainty, risk, and using expected value approaches. It then describes the basic decision process and some causes of poor decisions like not following the full process or bounded rationality. It defines decision environments of certainty, risk, and uncertainty and the appropriate analysis techniques for each. It also describes approaches to decision making under each environment like maximin, maximax, and minimax regret. Finally, it discusses using expected monetary value for decision making under risk.
Chapter 6 Decision Making The Essence Of The Managers Job Ppt06D
The document discusses decision making and the decision making process for managers. It outlines 8 steps in the decision making process including identifying the problem, criteria, alternatives, analysis, selection, implementation, and evaluation. It also discusses rational decision making and biases managers may exhibit, such as overconfidence and anchoring effects. Finally, it provides guidelines for effective decision making including understanding cultural differences, using an effective process, and embracing complexity.
The document discusses decision making as the essence of a manager's job. It outlines an 8-step decision making process: 1) identify the problem, 2) identify decision criteria, 3) allocate weights to criteria, 4) develop alternatives, 5) analyze alternatives, 6) select an alternative, 7) implement the alternative, and 8) evaluate the decision. It also discusses types of problems/decisions, decision making styles, biases that can influence decisions, and guidelines for effective decision making.
This document discusses different approaches to decision making including certainty, uncertainty, and risk. It begins with an outline of the chapter which describes how managers need structure to make decisions in complex conditions. It then covers decision making with certainty, uncertainty using criteria like Laplace, Wald, and Savage, risk using expected values, and sequential decisions using decision trees. Limitations of the criteria are noted.
This document outlines the key concepts and steps in decision theory. It begins by listing the learning objectives related to decision making under uncertainty. It then describes the characteristics of problems suitable for decision theory and the general 5-step process. It discusses techniques for decision making under certainty, risk, and uncertainty, including expected monetary value. Examples are provided to illustrate concepts like payoff tables, maximin criterion, and decision trees. The document provides an overview of causes of poor decisions and mistakes to avoid in the decision process.
This document provides an overview of decision theory and decision making approaches under conditions of certainty, uncertainty, and risk. It defines key concepts in decision theory including alternatives, states of nature, payoffs, and decision criteria. Under certainty, the decision with the optimal payoff is chosen. Under uncertainty, approaches like maximax, maximin, minimax regret, and insufficient reason are used. Under risk, expected monetary value and expected opportunity loss can be calculated using known probabilities to identify the best alternative. The document uses examples to illustrate the application of each decision making approach.
This document discusses using Multiple Criteria Decision Analysis (MCDA) to help companies select countries for new business ventures. MCDA provides a formal, rigorous approach to evaluate multiple criteria, integrate both objective and subjective factors, and help decision-makers understand trade-offs between options. The document provides background on MCDA and reviews literature showing MCDA has not been widely used for country selection, especially among small businesses. It then presents an example MCDA model to analyze country selection criteria and rank potential countries.
This document outlines Chapter 14 of Managerial Accounting II which discusses decision making and relevant costs and benefits. It covers the six steps in the decision making process and the managerial accountant's role in providing relevant information to managers. Relevant information must be pertinent to the decision, differ among alternatives, involve future costs/benefits, and allow for predictions. The chapter illustrates the identification of relevant versus irrelevant costs through examples of equipment replacement and flight route decisions at an airline. Sunk costs that cannot be changed are deemed irrelevant, while future differential costs that vary among alternatives are relevant.
This document outlines key concepts in decision theory. It begins by listing the learning objectives, which are to outline the decision process, describe causes of poor decisions, and techniques for decision making under uncertainty, risk, and using expected value approaches. It then describes the basic decision process and some causes of poor decisions like not following the full process or bounded rationality. It defines decision environments of certainty, risk, and uncertainty and the appropriate analysis techniques for each. It also describes approaches to decision making under each environment like maximin, maximax, and minimax regret. Finally, it discusses using expected monetary value for decision making under risk.
Chapter 6 Decision Making The Essence Of The Managers Job Ppt06D
The document discusses decision making and the decision making process for managers. It outlines 8 steps in the decision making process including identifying the problem, criteria, alternatives, analysis, selection, implementation, and evaluation. It also discusses rational decision making and biases managers may exhibit, such as overconfidence and anchoring effects. Finally, it provides guidelines for effective decision making including understanding cultural differences, using an effective process, and embracing complexity.
The document discusses decision making as the essence of a manager's job. It outlines an 8-step decision making process: 1) identify the problem, 2) identify decision criteria, 3) allocate weights to criteria, 4) develop alternatives, 5) analyze alternatives, 6) select an alternative, 7) implement the alternative, and 8) evaluate the decision. It also discusses types of problems/decisions, decision making styles, biases that can influence decisions, and guidelines for effective decision making.
This document discusses different approaches to decision making including certainty, uncertainty, and risk. It begins with an outline of the chapter which describes how managers need structure to make decisions in complex conditions. It then covers decision making with certainty, uncertainty using criteria like Laplace, Wald, and Savage, risk using expected values, and sequential decisions using decision trees. Limitations of the criteria are noted.
This document outlines the key concepts and steps in decision theory. It begins by listing the learning objectives related to decision making under uncertainty. It then describes the characteristics of problems suitable for decision theory and the general 5-step process. It discusses techniques for decision making under certainty, risk, and uncertainty, including expected monetary value. Examples are provided to illustrate concepts like payoff tables, maximin criterion, and decision trees. The document provides an overview of causes of poor decisions and mistakes to avoid in the decision process.
This document provides an overview of decision theory and decision making approaches under conditions of certainty, uncertainty, and risk. It defines key concepts in decision theory including alternatives, states of nature, payoffs, and decision criteria. Under certainty, the decision with the optimal payoff is chosen. Under uncertainty, approaches like maximax, maximin, minimax regret, and insufficient reason are used. Under risk, expected monetary value and expected opportunity loss can be calculated using known probabilities to identify the best alternative. The document uses examples to illustrate the application of each decision making approach.
This document discusses using Multiple Criteria Decision Analysis (MCDA) to help companies select countries for new business ventures. MCDA provides a formal, rigorous approach to evaluate multiple criteria, integrate both objective and subjective factors, and help decision-makers understand trade-offs between options. The document provides background on MCDA and reviews literature showing MCDA has not been widely used for country selection, especially among small businesses. It then presents an example MCDA model to analyze country selection criteria and rank potential countries.
This document outlines Chapter 14 of Managerial Accounting II which discusses decision making and relevant costs and benefits. It covers the six steps in the decision making process and the managerial accountant's role in providing relevant information to managers. Relevant information must be pertinent to the decision, differ among alternatives, involve future costs/benefits, and allow for predictions. The chapter illustrates the identification of relevant versus irrelevant costs through examples of equipment replacement and flight route decisions at an airline. Sunk costs that cannot be changed are deemed irrelevant, while future differential costs that vary among alternatives are relevant.
This document discusses decision making tools and models. It outlines a six step process for decision making: 1) define the problem and influencing factors, 2) develop specific and measurable objectives, 3) develop a model of the relationship between objectives and variables, 4) evaluate alternatives and their merits/drawbacks, 5) select the best alternative, 6) implement the decision and set a timeline. It also discusses the fundamentals of decision making under uncertainty, risk, and certainty, including key terms like alternatives and states of nature.
This document describes a genetic learning algorithm called GLOWER that is designed for financial prediction problems. It discusses how financial prediction is difficult due to high dimensionality, weak nonlinear relationships between variables, and important variable interactions. Standard algorithms like decision trees are limited by their greedy search approach, which can miss complex patterns. Genetic algorithms can perform a more thorough search without biases. The paper evaluates GLOWER on several datasets and finds it uncovers more effective patterns than other algorithms for difficult problems with weak structure.
This document contains an assignment for MBA students at Rift Valley University in Harar, Ethiopia. The assignment covers various topics in managerial economics, including the effects of managerial decisions on firm value, areas of decision making, demand estimation and forecasting, elasticity of demand, production functions, costs, and market structures. Students are asked to analyze case studies, define key concepts, derive equations, and discuss topics like marginal cost, opportunity cost, economies and diseconomies of scale. The assignment involves quantitative and qualitative questions and requires applying economic principles to managerial decision making.
1. The document outlines concepts and techniques for decision theory, including decision making under certainty, risk, and uncertainty. It describes using expected value, decision trees, and sensitivity analysis to evaluate alternatives and make optimal decisions.
2. Key steps in decision making are identified as identifying alternatives and possible future states, estimating payoffs, and selecting the best alternative using decision criteria like expected monetary value.
3. Common errors in decision making include failures in properly defining the problem or alternatives, bounded rationality limiting rational analysis, and suboptimization where departments focus on their own goals.
This presentation summarizes key aspects of decision analysis and decision making under uncertainty. It discusses decision criteria like maximax, maximin, and Laplace that can be used when outcomes are uncertain. When probabilities are known, criteria for decision making under risk are used. Sequential decisions can be modeled with decision trees, which represent decisions, chances, and outcomes with nodes and paths. The presentation was given to MBA students on the topic of decision analysis.
Managers use a short-term horizon to maximize their utility function. Short-term profitability of banking institutions is one of the most important determinants of bonus packages and managers are therefore motivated to produce highest possible returns on equity by lowering equity buffers to the lowest possible level. Framing effects approach shows that managers engage into risk seeking behavior in order to avoid sure loss (thus, to guarantee that they receive higher bonus), although risk adverse behavior is a preferred choice. Lessons learned from the financial crisis are the importance of introducing behavioral finance concepts into a daily banking activities, increase information transparency, and try to find alternative measures of managers’ efficiency – measures that would stimulate setting up long-term value functions.
The document outlines learning objectives for a chapter on decision making. It discusses the eight steps in the decision-making process, factors that influence decision making like bounded rationality and intuition. It also describes different types of decisions, biases that can affect decision making, and strategies for effective decision making in complex environments.
The document discusses making investment decisions under uncertainty. It provides an example of a decision between investing in a large, medium, or small production facility based on possible future demand levels. A decision tree is developed to analyze the options, showing potential outcomes and their probabilities. The document explains how to construct a decision tree to evaluate investment alternatives systematically and determine the option with the highest expected value.
Decision making is one of the most important managerial activities. There are several approaches to decision making, including the classical model which assumes rationality and perfect information, and the administrative model which recognizes limitations like bounded rationality. Effective decision making involves defining the problem, identifying alternatives, evaluating alternatives based on feasibility, satisfaction and affordability, selecting the best alternative, implementing it, and following up on results. Behavioral aspects like intuition, politics and risk preferences also influence decisions.
1) The document discusses tools and techniques for managerial decision making. It explains that decision making is a process that involves multiple steps: establishing objectives, identifying alternatives, evaluating alternatives, selecting the best option, implementing, and monitoring performance.
2) Several economic tools are described that can help managers in decision making, including opportunity cost, incremental principle, time perspective principle, discounting principle, and equi-marginal principle. These tools help managers evaluate costs and revenues of different alternatives.
3) Managerial decision making is influenced not just by economics but also human/behavioral factors, technology, and the external environment. A variety of concepts from economic theory can assist managers in analyzing problems and making informed choices.
This document discusses decision theory and various approaches to decision making under different conditions of certainty, uncertainty, and risk. It covers topics such as decision alternatives, states of nature, payoffs, payoff tables, and criteria for decision making including maximax, maximin, Hurwicz, minimax regret, expected monetary value, and expected value of perfect information. The goal is to help decision makers determine the optimal approach and choice given whether the state of nature is known, unknown but probabilities are known, or unknown without probabilities.
Chapter Two
Decision Making
Decision Making: is defined as the process of selecting or choosing the best course of action from numbers of alternatives based on the criteria. Because managers are continually confronted with opportunities and problems, they must constantly analyze the effect of different decisions on their organizations and select the alternative that will move the firm toward its stated objectives.
Types of Decisions: Several authors believe that there are two types of decisions: programmed & non-programmed decisions.
A. Programmed decisions: These decisions are "programmable" because of a specific procedure can be worked out to resolve them based on experience in similar situations.
• Once a standard procedure has been established, it can be used to treat all like situations.
• They usually involve an organization's every day operational and administrative activities
• They are primarily found at the middle and lower levels of management.
• Data used in making a programmed decision usually are complete and well defined.
• Participants know the details and agree on how to resolve the problem.
B. Non-programmed Decisions: are used to solve nonrecurring problems/Non-Repetitive problems.
• No well-established procedure exists for handling them, primarily because managers do not have experience to draw upon.
• In contrast to programmed decisions, available data are usually incomplete.
• Non programmable decisions are commonly found at the middle and top levels of management and often is related to an organization's policy-making activities such as whether to add a product to the existing product line, to reorganize the company, or to acquire another firm, are examples
The steps in decision making process include the following:
1. Ascertain the need for a decision/Identify the problem:
The decision making process begins by determining a problem exists; that is, there is an unsatisfactory condition.
2. Establish decision criteria:
Once the need for a decision has been determined, there comes a need to establish decision criteria which requires identifying those characteristics that are important in making the decision.
3. Allocate weights to criteria
The identified criteria should be weighted based on their importance and arranged in priority. This is because some are obviously more important than others and we need to weight each criterion to reflect its importance in the decision.
4. Develop Alternatives
This involves developing a list of the alternative that may be viable in dealing with the stated problem.
5. Evaluate Alternatives
Once the alternatives are enumerated. The decision maker must critically evaluate each one and identify the strong and weak points when compared against the criteria and the weights established. In evaluating each alternative, we not only consider things that can be measured in numerical terms such as time and various types of fixed & operating costs,
Business decision, resource mgt and cost benefit analysisMohammed Jasir PV
The document provides information on decision making under conditions of certainty, risk, and uncertainty. It discusses three main types of decision making environments - certainty, where all outcomes are known; risk, where probabilities of outcomes are known; and uncertainty, where little is known about outcomes. Modern approaches to decision making under uncertainty include risk analysis, decision trees, and preference theory. Cost-benefit analysis is also summarized as a technique to evaluate the costs and benefits of potential decisions.
Here is a handout containing the PowerPoint Presentation contents of the of the Presentation version of this subject.
Decision Making in Terms of Engineering Management.
This document discusses principles of management related to decision making. It describes the eight steps in the decision making process as identifying a problem, criteria, weights, alternatives, analysis, selection, implementation, and evaluation. It also discusses three decision making models: rational, bounded rationality, and intuition. Finally, it classifies decisions as structured/programmed or unstructured/non-programmed and discusses biases that can affect decision making.
This document discusses decision making environments and techniques. It describes three types of decision making environments: decision making under certainty, uncertainty, and risk. It also discusses decision trees, Bayesian analysis, and utility theory as tools for decision making under uncertainty and risk. The key techniques covered are expected value analysis, maximax/maximin criteria, and expected opportunity loss criterion for decision making under risk.
This document discusses decision making in management. It begins by defining decision making as the process of choosing among alternatives. It then outlines the typical 8-step decision making process used by managers: 1) identifying a problem, 2) identifying decision criteria, 3) allocating weights to criteria, 4) developing alternatives, 5) analyzing alternatives, 6) selecting an alternative, 7) implementing the decision, and 8) evaluating the decision's effectiveness. The document also discusses different types of managerial decisions, approaches to decision making like rationality and bounded rationality, decision making conditions involving certainty, risk and uncertainty, and decision making styles.
Exam Questions1. (Mandatory) Assess the strengths and weaknesse.docxtheodorelove43763
Exam Questions:
1. (Mandatory) Assess the strengths and weaknesses of Divine Command Theory. Give a strong, well-supported argument in favor of (or opposed to) DCT for ethical decision-making.
1. (Mandatory) Explain the ethical theory of Thomas Hobbes, David Hume,
or
Immanuel Kant, primarily concerning morality and justice. Include contextual/background factors that shaped the theory. Also, tell why you agree or disagree with it, providing a present-day illustration to support your position.
Choose
either
3 or 4:
1. Analyze the strengths and weaknesses of Utilitarianism and Ethical Egoism. Provide an argument in favor of (or opposed to) either Utilitarianism or Ethical Egoism, using an illustration from history or personal experience.
2. Compare and contrast rationalism and empiricism, including one or more key figures representing each perspective. Focus primarily on the impact of these knowledge theories on ethical thinking (Christian or otherwise), both in the liberal arts and Western culture.
Each question must be answered with 250-300 words. Make sure to write as clearly and specifically as possible. Use your own words and include in-text citation, and provide references
.
Evolving Leadership roles in HIM1. Increased adoption of hea.docxtheodorelove43763
Evolving Leadership roles in HIM
1. Increased adoption of health information technology is opening innovative leadership pathways for HIM professionals. Four areas of opportunity based on the HIT roadmap created by the Office of the National Coordinator for Health Information Technology include privacy and security, adoption of information technology, interoperability, and collaborative governance. Choose one of these to explore, listing the challenges and opportunities for HIM professionals.
2. Take one of the challenges you presented and address it by using the 3 I’s Leadership Model for e-HIM that AHIMA adapted.
3. Postulate how earning an AHIMA credential can prepare you for leadership opportunity.
AHIMA. 2016a. e-HIM Overview and Instructions. AHIMA Leadership Model. http://library.ahima. org/xpedio/groups/public/documents/ahima/bok1_042565.pdf
AHIMA. 2016b. Why Get Certified. Certification. http://www.ahima.org/certification/whycertify Zeng, X., Reynolds, R., and Sharp, M. 2009. Redefining the Roles of Health Information Management Professionals in Health Information Technology. Perspectives in Health Information Management. (6). http://perspectives.ahima.org/redefining-the-roles-of-health-information-managementprofessionals-in-health-information-technology/#.VfWxFNJVhBc
.
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This document discusses decision making tools and models. It outlines a six step process for decision making: 1) define the problem and influencing factors, 2) develop specific and measurable objectives, 3) develop a model of the relationship between objectives and variables, 4) evaluate alternatives and their merits/drawbacks, 5) select the best alternative, 6) implement the decision and set a timeline. It also discusses the fundamentals of decision making under uncertainty, risk, and certainty, including key terms like alternatives and states of nature.
This document describes a genetic learning algorithm called GLOWER that is designed for financial prediction problems. It discusses how financial prediction is difficult due to high dimensionality, weak nonlinear relationships between variables, and important variable interactions. Standard algorithms like decision trees are limited by their greedy search approach, which can miss complex patterns. Genetic algorithms can perform a more thorough search without biases. The paper evaluates GLOWER on several datasets and finds it uncovers more effective patterns than other algorithms for difficult problems with weak structure.
This document contains an assignment for MBA students at Rift Valley University in Harar, Ethiopia. The assignment covers various topics in managerial economics, including the effects of managerial decisions on firm value, areas of decision making, demand estimation and forecasting, elasticity of demand, production functions, costs, and market structures. Students are asked to analyze case studies, define key concepts, derive equations, and discuss topics like marginal cost, opportunity cost, economies and diseconomies of scale. The assignment involves quantitative and qualitative questions and requires applying economic principles to managerial decision making.
1. The document outlines concepts and techniques for decision theory, including decision making under certainty, risk, and uncertainty. It describes using expected value, decision trees, and sensitivity analysis to evaluate alternatives and make optimal decisions.
2. Key steps in decision making are identified as identifying alternatives and possible future states, estimating payoffs, and selecting the best alternative using decision criteria like expected monetary value.
3. Common errors in decision making include failures in properly defining the problem or alternatives, bounded rationality limiting rational analysis, and suboptimization where departments focus on their own goals.
This presentation summarizes key aspects of decision analysis and decision making under uncertainty. It discusses decision criteria like maximax, maximin, and Laplace that can be used when outcomes are uncertain. When probabilities are known, criteria for decision making under risk are used. Sequential decisions can be modeled with decision trees, which represent decisions, chances, and outcomes with nodes and paths. The presentation was given to MBA students on the topic of decision analysis.
Managers use a short-term horizon to maximize their utility function. Short-term profitability of banking institutions is one of the most important determinants of bonus packages and managers are therefore motivated to produce highest possible returns on equity by lowering equity buffers to the lowest possible level. Framing effects approach shows that managers engage into risk seeking behavior in order to avoid sure loss (thus, to guarantee that they receive higher bonus), although risk adverse behavior is a preferred choice. Lessons learned from the financial crisis are the importance of introducing behavioral finance concepts into a daily banking activities, increase information transparency, and try to find alternative measures of managers’ efficiency – measures that would stimulate setting up long-term value functions.
The document outlines learning objectives for a chapter on decision making. It discusses the eight steps in the decision-making process, factors that influence decision making like bounded rationality and intuition. It also describes different types of decisions, biases that can affect decision making, and strategies for effective decision making in complex environments.
The document discusses making investment decisions under uncertainty. It provides an example of a decision between investing in a large, medium, or small production facility based on possible future demand levels. A decision tree is developed to analyze the options, showing potential outcomes and their probabilities. The document explains how to construct a decision tree to evaluate investment alternatives systematically and determine the option with the highest expected value.
Decision making is one of the most important managerial activities. There are several approaches to decision making, including the classical model which assumes rationality and perfect information, and the administrative model which recognizes limitations like bounded rationality. Effective decision making involves defining the problem, identifying alternatives, evaluating alternatives based on feasibility, satisfaction and affordability, selecting the best alternative, implementing it, and following up on results. Behavioral aspects like intuition, politics and risk preferences also influence decisions.
1) The document discusses tools and techniques for managerial decision making. It explains that decision making is a process that involves multiple steps: establishing objectives, identifying alternatives, evaluating alternatives, selecting the best option, implementing, and monitoring performance.
2) Several economic tools are described that can help managers in decision making, including opportunity cost, incremental principle, time perspective principle, discounting principle, and equi-marginal principle. These tools help managers evaluate costs and revenues of different alternatives.
3) Managerial decision making is influenced not just by economics but also human/behavioral factors, technology, and the external environment. A variety of concepts from economic theory can assist managers in analyzing problems and making informed choices.
This document discusses decision theory and various approaches to decision making under different conditions of certainty, uncertainty, and risk. It covers topics such as decision alternatives, states of nature, payoffs, payoff tables, and criteria for decision making including maximax, maximin, Hurwicz, minimax regret, expected monetary value, and expected value of perfect information. The goal is to help decision makers determine the optimal approach and choice given whether the state of nature is known, unknown but probabilities are known, or unknown without probabilities.
Chapter Two
Decision Making
Decision Making: is defined as the process of selecting or choosing the best course of action from numbers of alternatives based on the criteria. Because managers are continually confronted with opportunities and problems, they must constantly analyze the effect of different decisions on their organizations and select the alternative that will move the firm toward its stated objectives.
Types of Decisions: Several authors believe that there are two types of decisions: programmed & non-programmed decisions.
A. Programmed decisions: These decisions are "programmable" because of a specific procedure can be worked out to resolve them based on experience in similar situations.
• Once a standard procedure has been established, it can be used to treat all like situations.
• They usually involve an organization's every day operational and administrative activities
• They are primarily found at the middle and lower levels of management.
• Data used in making a programmed decision usually are complete and well defined.
• Participants know the details and agree on how to resolve the problem.
B. Non-programmed Decisions: are used to solve nonrecurring problems/Non-Repetitive problems.
• No well-established procedure exists for handling them, primarily because managers do not have experience to draw upon.
• In contrast to programmed decisions, available data are usually incomplete.
• Non programmable decisions are commonly found at the middle and top levels of management and often is related to an organization's policy-making activities such as whether to add a product to the existing product line, to reorganize the company, or to acquire another firm, are examples
The steps in decision making process include the following:
1. Ascertain the need for a decision/Identify the problem:
The decision making process begins by determining a problem exists; that is, there is an unsatisfactory condition.
2. Establish decision criteria:
Once the need for a decision has been determined, there comes a need to establish decision criteria which requires identifying those characteristics that are important in making the decision.
3. Allocate weights to criteria
The identified criteria should be weighted based on their importance and arranged in priority. This is because some are obviously more important than others and we need to weight each criterion to reflect its importance in the decision.
4. Develop Alternatives
This involves developing a list of the alternative that may be viable in dealing with the stated problem.
5. Evaluate Alternatives
Once the alternatives are enumerated. The decision maker must critically evaluate each one and identify the strong and weak points when compared against the criteria and the weights established. In evaluating each alternative, we not only consider things that can be measured in numerical terms such as time and various types of fixed & operating costs,
Business decision, resource mgt and cost benefit analysisMohammed Jasir PV
The document provides information on decision making under conditions of certainty, risk, and uncertainty. It discusses three main types of decision making environments - certainty, where all outcomes are known; risk, where probabilities of outcomes are known; and uncertainty, where little is known about outcomes. Modern approaches to decision making under uncertainty include risk analysis, decision trees, and preference theory. Cost-benefit analysis is also summarized as a technique to evaluate the costs and benefits of potential decisions.
Here is a handout containing the PowerPoint Presentation contents of the of the Presentation version of this subject.
Decision Making in Terms of Engineering Management.
This document discusses principles of management related to decision making. It describes the eight steps in the decision making process as identifying a problem, criteria, weights, alternatives, analysis, selection, implementation, and evaluation. It also discusses three decision making models: rational, bounded rationality, and intuition. Finally, it classifies decisions as structured/programmed or unstructured/non-programmed and discusses biases that can affect decision making.
This document discusses decision making environments and techniques. It describes three types of decision making environments: decision making under certainty, uncertainty, and risk. It also discusses decision trees, Bayesian analysis, and utility theory as tools for decision making under uncertainty and risk. The key techniques covered are expected value analysis, maximax/maximin criteria, and expected opportunity loss criterion for decision making under risk.
This document discusses decision making in management. It begins by defining decision making as the process of choosing among alternatives. It then outlines the typical 8-step decision making process used by managers: 1) identifying a problem, 2) identifying decision criteria, 3) allocating weights to criteria, 4) developing alternatives, 5) analyzing alternatives, 6) selecting an alternative, 7) implementing the decision, and 8) evaluating the decision's effectiveness. The document also discusses different types of managerial decisions, approaches to decision making like rationality and bounded rationality, decision making conditions involving certainty, risk and uncertainty, and decision making styles.
Exam Questions1. (Mandatory) Assess the strengths and weaknesse.docxtheodorelove43763
Exam Questions:
1. (Mandatory) Assess the strengths and weaknesses of Divine Command Theory. Give a strong, well-supported argument in favor of (or opposed to) DCT for ethical decision-making.
1. (Mandatory) Explain the ethical theory of Thomas Hobbes, David Hume,
or
Immanuel Kant, primarily concerning morality and justice. Include contextual/background factors that shaped the theory. Also, tell why you agree or disagree with it, providing a present-day illustration to support your position.
Choose
either
3 or 4:
1. Analyze the strengths and weaknesses of Utilitarianism and Ethical Egoism. Provide an argument in favor of (or opposed to) either Utilitarianism or Ethical Egoism, using an illustration from history or personal experience.
2. Compare and contrast rationalism and empiricism, including one or more key figures representing each perspective. Focus primarily on the impact of these knowledge theories on ethical thinking (Christian or otherwise), both in the liberal arts and Western culture.
Each question must be answered with 250-300 words. Make sure to write as clearly and specifically as possible. Use your own words and include in-text citation, and provide references
.
Evolving Leadership roles in HIM1. Increased adoption of hea.docxtheodorelove43763
Evolving Leadership roles in HIM
1. Increased adoption of health information technology is opening innovative leadership pathways for HIM professionals. Four areas of opportunity based on the HIT roadmap created by the Office of the National Coordinator for Health Information Technology include privacy and security, adoption of information technology, interoperability, and collaborative governance. Choose one of these to explore, listing the challenges and opportunities for HIM professionals.
2. Take one of the challenges you presented and address it by using the 3 I’s Leadership Model for e-HIM that AHIMA adapted.
3. Postulate how earning an AHIMA credential can prepare you for leadership opportunity.
AHIMA. 2016a. e-HIM Overview and Instructions. AHIMA Leadership Model. http://library.ahima. org/xpedio/groups/public/documents/ahima/bok1_042565.pdf
AHIMA. 2016b. Why Get Certified. Certification. http://www.ahima.org/certification/whycertify Zeng, X., Reynolds, R., and Sharp, M. 2009. Redefining the Roles of Health Information Management Professionals in Health Information Technology. Perspectives in Health Information Management. (6). http://perspectives.ahima.org/redefining-the-roles-of-health-information-managementprofessionals-in-health-information-technology/#.VfWxFNJVhBc
.
Evolution of Terrorism300wrdDo you think terrorism has bee.docxtheodorelove43763
Evolution of Terrorism
300wrd
Do you think terrorism has been on the rise over the past few years?
Why do you think so?
Analyze and explain how contemporary terrorism is different from historical terrorism. Explain this with a focus on how terrorist groups have adapted their methods to take advantage of modern advancements, such as the Internet and modern modes of transportation.
Can you think of any other modern developments that have been utilized by terrorists?
Analyze and explain why people become and remain involved in a terrorist movement?
What do they hope to achieve?
Define terrorism and explain in your own words how it is practiced. Elucidate if you think terrorism is a criminal act or an act of war. Support your answers with appropriate research and reasoning.
Briefly describe a terrorist incident (Orlando Florida night club shooting jun12 2016) from the past five years (from anywhere in the world). Describe the act and explain how those responsible for this act were identified. Analyze if the goal of the terrorist or the terrorist group was achieved.
.
Evidence-based practice is an approach to health care where health c.docxtheodorelove43763
Evidence-based practice is an approach to health care where health care professionals use the best evidence possible or the most appropriate information available to make their clinical decisions. Research studies are gathered from the literature and assessed so that decisions about application can be done so with as much insight as possible. Not all research is able to be taken into the clinical practice that is why assessing the literature and determining if it is possible to carry out in a safe and effective manner is important. The steps that make up the evidence-based practice is first to ask a question which pertains to your clinical practice, then search for research and literature that will help solve your question. Third step is to evaluate the evidence and determine if it can be used safely and effectively in your clinical practice, then you must apply the information to your clinical experience and with your patient’s values. Finally, you must evaluate the outcome and determine if the desired effect is being reached. (LoBiondo-Wood, 2014)
The nursing process is drilled into our education as nurses and with good reason. The nursing process is used countless times throughout our practice. I was taught the acronym ADPIE which stands for assessment, diagnosis, planning, implementation, and evaluation. When assessing it is important to gather as much information on the patient whether it be subjective or objective findings. After we make a nursing diagnosis based on our assessment and then we plan on how to best care for our patient, and what our goals and their goals are for their care. Once the plan is made and the patient consents to the care plan then we can implement the plan. After we implement, we evaluate whether our goals and the patient’s goals are being reached. If not, we begin the nursing process all over again. (LoBiondo-Wood, 2014) In my own practice I use the nursing practice on every patient and even do it multiple times. When a patient enters the emergency room they are immediately being assessed and then once the physical and interview assessments are done the nurse creates a nursing diagnosis. The nurse creates a care plan that is based on evidence-based practice and goes over it with patient to gain consent.
The difference between these two processes is how they begin. The nursing process begins by gathering as much information as possible to then give a nursing diagnosis. While evidence-based practice begins by posing a question first and then gathering as much information as possible. They do have similarities especially when it comes to the end of the processes. Evaluating whether the care plan is working in the nursing process or whether the research and literature brought out a successful new take on the clinical practice. They both need to make the outcomes are as expected and if they are not it is back to the beginning of the process.
References
LoBiondo-Wood, G., & Harber, J. (2014). Nursing Research. St.
Evidence-Based EvaluationEvidence-based practice is importan.docxtheodorelove43763
Evidence-Based Evaluation
Evidence-based practice is important in the field of public health. Discuss the connection between evidence-based practice and program evaluation. Using the Capella Library, find two articles using
evidence-based
as key words. Use the two articles you found and discuss evidence-based practices in public health, explaining how the evidence was obtained. Discuss the population that benefited from the program or project mentioned in the articles.
.
Evidence Table
Study Citation
Design
Method
Sample
Data Collection
Data Analysis
Validity
Reliability
TECHEDGE CASE STUDY WRITE-UP - OUTLINE 1
DESIGN AND IMPLEMENTATION OF PERFORMANCE MANAGEMENT SYSTEMS,
KPIs AND RESPONSIBILITY CENTRES
CASE WRITE-UP – OUTLINE
LAURA MATTOS | SHRUTI KODANDARAMU | ASHA BORA
Ottawa University EMBA | Organizational Behavior Theory
TECHEDGE CASE STUDY WRITE-UP - OUTLINE 2
Our consulting team, RAL Consulting, was hired by TechEdge to evaluate its current
organization structure and behavior, identify areas of needed improvement, point out a list of
actionable items for the company to improve its performance and how to implement those. This
case outlines our team’s consulting process to produce a final case write-up.
CASE OUTLINE
1. Introduction (at least 1 but no more than 2 pages)
Overview and history of TechEdge (one or two paragraphs)
TechEdge offered technology consulting service to other business, in a B2B business model.
According to Prabhu & Hedgei, the company structure was divided into sales, consulting,
support and services, back office operations, finance and software. All these departments were
led by vice presidents who reported to the CEO. The VPs assisted the managers, who led their
teams independently in their departments.
TechEdge: Main Organizational Behavior issues (half - 1 page)
The case presented a summarized list of challenges faced by TechEdge. (For next assignment,
List 5 major reasons listed on the case on page 5). Our consulting team identified a few
behaviors that might be driving these 5 major issues. These are:
§ HR v. VP responsibilities
o HRs responsibilities limited to recruiting while VPs were managing, training and
evaluating performance of the employees.
o HR not assisting with people management issues.
§ Team leader v. VP responsibilities
o Team leaders were responsible for team performance, but each team member
reported to their respective VP.
TECHEDGE CASE STUDY WRITE-UP - OUTLINE 3
o Lack of unity and shared objectives
§ Group v. Team structure.
o Different departments working together as temporary teams without a clear
common objective. Each department was more focused on their own tasks.
§ General sense of unaccountability between teams:
o All teams felt they didn’t receive adequate support from the operations
department
o Dissatisfaction from Operations VP: Complaints about overload of work,
dependency on external factors, and not enough time to fulfil other teams’
expectations
o Finance team complained about not having enough funds due to bad performance
of the sales team
§ General feeling that the company was understaffed
§ HR team couldn’t hire the best employees offering low wages
Among all items listed, our consulting team considers the following the m.
Evidence SynthesisCritique the below evidence synthesis ex.docxtheodorelove43763
Evidence Synthesis
Critique the below evidence synthesis exemplar to address the following.
Patient falls with injury and fall prevention remain complex phenomena in the acute care setting as well as a major challenge for healthcare professionals (Gygax Spicer, 2017). Patient falls are considered one of the leading adverse events occurring in acute care settings such as hospitals and nursing homes, with the detrimental impact to the patient ranging from mild to severe bruising, fractures, trauma, and even death (de Medeiros Araújo et al., 2017). Falls are common phenomena in older adults, with roughly one out of three people age 65 years and older who suffers from at least one fall per year due to multiple factors including environmental, social, and physiological factors either alone or in conjunction (Gygax Spicer, 2017). The etiology is that patients are attempting to get out of bed without assistance from nursing staff. Several of the causative factors include illness, impulsiveness, urgency, medications, or being in an unfamiliar environment. Lastly, there has been an increase in the amount of turnover in staffing, thus reducing the amount of available nursing staff in the practice setting.
Does the author clearly identify the scope of the evidence synthesis? Explain your rationale.
Are strong paraphrased sentences included that are supported by contemporary sources of research evidence? Explain your rationale.
Are the facts related to the practice problem presented in an objective manner? Explain your rationale.
Does the author use sources to support ideas and claims, and not the other way around? Explain your rationale.
Based on your appraisal, is this exemplar a true synthesis of the evidence? Or is it a summary of the evidence? Explain your rationale.
Instructions:
Use an
APA 7 style and a minimum of 250 words
. Provide
support from a minimum of at least three (3) scholarly sources.
The scholarly source needs to be: 1) evidence-based, 2) scholarly in nature, 3) Sources should be no more than five years old (
published within the last 5 years), and 4) an in-text citation.
citations and references are included when information is summarized/synthesized and/or direct quotes are used, in which
APA style
standards apply.
• Textbooks are not considered scholarly sources.
• Wikipedia, Wikis, .com website or blogs should not be used.
.
Evidence Collection PolicyScenarioAfter the recent secur.docxtheodorelove43763
Evidence Collection Policy
Scenario
After the recent security breach, Always Fresh decided to form a computer security incident response team (CSIRT). As a security administrator, you have been assigned the responsibility of developing a CSIRT policy that addresses incident evidence collection and handling. The goal is to ensure all evidence collected during investigations is valid and admissible in court.
Consider the following questions for collecting and handling evidence:
1. What are the main concerns when collecting evidence?
2. What precautions are necessary to preserve evidence state?
3. How do you ensure evidence remains in its initial state?
4. What information and procedures are necessary to ensure evidence is admissible in court?
Tasks
Create a policy that ensures all evidence is collected and handled in a secure and efficient manner. Remember, you are writing a policy, not procedures. Focus on the high-level tasks, not the individual steps.
Address the following in your policy:
§ Description of information required for items of evidence
§ Documentation required in addition to item details (personnel, description of circumstances, and so on)
§ Description of measures required to preserve initial evidence integrity
§ Description of measures required to preserve ongoing evidence integrity
§ Controls necessary to maintain evidence integrity in storage
§ Documentation required to demonstrate evidence integrity
Required Resources
§ Internet access
§ Course textbook
Submission Requirements
§ Format: Microsoft Word (or compatible)
§ Font: Times New Roman, size 12, double-space
§ Citation Style: APA
§ Length: 2 to 4 pages
Self-Assessment Checklist
§ I created a policy that addressed all issues.
§ I followed the submission guidelines.
.
Everyone Why would companies have quality programs even though they.docxtheodorelove43763
Everyone: Why would companies have quality programs even though they cost money to implement?
Everyone: Define and explain three of the iPhone features in measurable terms.
Everyone: Referring to the leading causes of death, explain how you would develop an action plan.
#2. Explain how you would measure quality when buying a car wash.
.
Even though technology has shifted HRM to strategic partner, has thi.docxtheodorelove43763
Even though technology has shifted HRM to strategic partner, has this change resulted in HRM losing sight of its role towards employee resource and support? While companies are seeing the value in moving to a technological based business, how might HRM technology impact the "human" side of "human resource"?
.
Even though people are aware that earthquakes and volcanoes typi.docxtheodorelove43763
Even though people are aware that earthquakes and volcanoes typically occur in consistent regions, many make their homes in these locations. Unfortunately, history shows that it is only a matter of time before the next occurrence.
Perform some research on earthquake and volcano incidents that had a negative effect on people in a region. Select a disaster event where, despite the loss of life and property, the residents choose to rebuild rather than abandon the region.
For your initial post:
In your initial post, address the following:
Describe the event you selected, including:
the type and magnitude of the event
where it occurred
when it occurred
the various ways in which people were affected
whether that type of disaster affects the region repeatedly
State your opinion regarding the following questions:
Why do you think people continue to make the known dangerous area their home?
Should governments allow people to live in known risk areas?
Should insurance companies allow claims for damages incurred in known risk areas?
.
Evaluative Essay 2 Grading RubricCriteriaLevels of Achievement.docxtheodorelove43763
Evaluative Essay 2 Grading Rubric
Criteria Levels of Achievement
Content 70% Advanced 90-100% (A) Proficient 70-89% (B-C) Developing 1-69% (< D) Not present
Analysis
30 points 30 to27 points
o Thesis statement provides a clear, strong analysis, responding to the topic prompt.
o Paper demonstrates exceptional critical thinking skills.
o Logical presentation of information, body supports the thesis statement.
26 to 21 points
o Thesis statement is clear but could be stronger.
o Paper demonstrates good critical thinking skills.
o Logical presentation with good connections, but could be stronger.
OR
o Thesis statement does not provide a clear analysis.
o OR Thesis statement is evident but misplaced (located somewhere other than the end of the introduction).
o Evidence of critical thinking skills, but analysis could be stronger or more evident.
o Weak logic, or missing connections.
20 to 1 points
o Missing thesis statement.
o Focus of paper is more informative than analytical, with details focusing on the what rather than the why or how.
0 points
o Does not meet minimum requirements for the assignment.
**See instructor feedback for specifics.
Support
30 points 30 to 27 points
o Draws from assigned sources for supporting details.
o Provides specific, detailed support.
o Clear connections are made throughout the writing to show how supporting documents prove the main argument.
o No outside sources were consulted or used.
26 to 21 points
o Draws from assigned sources for supporting details, but support could be more specific.
o Connections are made between supporting details and main argument, but these could be more clear.
OR
o Supporting details are provided but connections are largely missing between the supporting details and the main argument.
20 to 1 points
o To include any of the following:
o Supporting details drawn primarily from textbook/lectures, instead of assigned sources.
o OR
o Supporting details merely informative and do not show clear connection to the thesis.
o OR
o Outside sources used in support.
0 points
o Does not meet minimum requirements for the assignment.
**See instructor feedback for specifics.
Biblical Evaluation
10 points 10 to 9 points
o Clear, Biblical evaluation provided, drawing from specific Scripture for support.
8 to 7 points
o Biblical evaluation is evident, and some use of Scripture is given for support.
OR
o Attempt at Biblical evaluation is provided, but support could be stronger.
6 to 1 points
o Christian worldview is evident in the writing, and some examples or details may be given, but a specific Biblical evaluation is not evident/clear.
o No Scriptural support
o OR
o Scripture included but connections to evaluation are not evident.
o 0 points
o Does not meet minimum requirements for the assignment.
**See instructor feedback for specifics.
Structure 30% Advanced 90-100% (A) Proficient 70-89% (B-C) Developing 1-69% (< D) Not present
.
Evaluation Title Research DesignFor this first assignment, .docxtheodorelove43763
Evaluation Title: Research Design
For this first assignment, you will analyze different types of research. To begin, please read and view the following materials:
Rice University. (2017).
2.2 Approaches to research (Links to an external site.)Links to an external site.
. in,
Psychology
. OpenStax. [Electronic version]
University of Minnesota Libraries Publishing. (2010).
2.2 Psychologists use descriptive, correlational, and experimental research designs to understand behavior (Links to an external site.)Links to an external site.
. In Introduction to Psychology. [Electronic version]
Select one research design from column A
and
column B.
Describe the design.
Discuss the strengths and weaknesses of the design.
Give an example of a study completed using this design.
This information is all available in the Unit 1 Learning Content. There are also resources available online to further your understanding.
Your assignment should be typed into a Word or other word processing document, formatted in APA style. The assignment must include:
Running head
A title page with Assignment name
Your name
Professor’s name
Course
.
Evaluation is the set of processes and methods that managers and sta.docxtheodorelove43763
Evaluation is the set of processes and methods that managers and stakeholders use to determine whether the program is successful. Success is determined by multiple parameters such as financial viability of the program as well as the administrative and clinical impact of the program on the community’s or organization’s mission. Today’s programs are also expected to proactively address healthcare disparities and inequities in all levels of communities and demonstrate measureable reductions in inequities in diverse patient/client populations.
For this milestone, you will create an evaluation plan that will include the financial aspects of your proposed program as well as your evaluation methods. In your submission, be sure to include the following:
Proposed Program :to establish a department in IGM to facilitate holistic care of pediatric patients. This holistic care will require patients to be monitored before, during, and after a clinical procedure. The program will be flexible to ensure that each patient receives customized care at a subsidized fee.
Financial Aspects
o What specific resources would you suggest for use in your program? For example, what staffing and equipment suggestions would you make?
Be sure to explain your rationale.
o What is the impact on the community’s or organization’s current budget? In other words, will the program fit into the existing budget, or willconcessions need to be made?
o What recommendations would you make for ensuring the program is financially sustainable? Are there measurable expense reductions for the community/organization that cover the costs of the program? Does the program create new sources of revenue for the community or organization to offset the costs of the program?
Evaluation
o What will you measure (such as benchmarks, patient outcomes, or other measurable data) in order to evaluate the effectiveness of the program implementation? Focus on both administrative and clinical measures. Include multiple levels of measurement, including the patients/clients served, populations of patients/clients served, and community environmental measures.
o What tools will you use to measure the effect of your program on reducing the incidence of healthcare disparities?
o How will these evaluation tools tell you whether the program is successful?
o To what extent will the program help ensure healthcare equity across diverse populations? Be sure to justify your reasoning.
Guidelines for Submission: Your paper for this milestone must be submitted as a 2- to 3-page Microsoft Word document with double spacing, 12-point Times New Roman font, one-inch margins, and proper APA formatting. Include at least three peer-reviewed, scholarly resources.
.
Evaluation Plan with Policy RecommendationAfter a program ha.docxtheodorelove43763
Evaluation Plan with Policy Recommendation
After a program has been created, it must be evaluated in order to determine its success. For this assignment, complete the following:
Incorporate the changes to address the feedback received.
Use the feedback from your instructor to address pertinent sections for errors or insufficiencies. Implementing this feedback will help you draft this assignment and your course project.
Discuss the program to be introduced to the selected population to address the specific public health problem or issue.
Assess population needs, assets, and capacities that affect communities' health through epidemiological records and literature reviews. Explain activities and resources to be introduced and used for this program to change behaviors and health outcomes and why they are selected.
Describe the projected goals for the program.
Based on past studies and available data, analyze the projected expected effects of the program.
Identify the engaged stakeholders.
Describe those involved, those affected, and the primary intended users.
Gather credible evidence to substantiate the need for the program.
Identify past programs similar to the proposed program and the outcomes for those past programs.
Explain past study results and epidemiological data for similar programs implemented.
Justify conclusions on the past programs and provide lessons learned for implementing this program.
Analyze how data will be collected from program participants and other relevant stakeholders to determine program effectiveness.
Identify what instruments will be used to collect data, such as surveys, focus group interviews, or key informant interviews.
Determine who will analyze the data and how the data will be analyzed.
Propose policy recommendations.
Evaluate policies for their impact on public health and health equity. Discuss multiple dimensions of the policy-making process, including the roles of ethics and evidence.
Discuss dissemination and communication suggestions for the evaluation results both in writing and through oral presentation.
Explain how the results will be shared with key stakeholders and the community.
Identify how the results will inform future programs and how they can improve health outcomes.
View the scoring guide to ensure you fulfill all grading criteria.
Additional Requirements
Length:
A minimum of 10–12 double-spaced pages, not including title and reference pages.
Font:
Arial, 12 point.
References:
Cite at least eight references from peer-reviewed journals.
Format:
Use current APA style and formatting.
Resources
Evaluation Plan with Policy Recommendation Scoring Guide
.
APA Style Paper Tutorial [DOCX]
.
APA Style Paper Template [DOCX]
.
Capella Writing Center
.
Public Health Intervention Plan.
Capella University Library.
State Policy Guide: Using Research in Public Health Policymaking
.
Public Health Masters Research Guide
.
Pub.
Evaluate the history of the Data Encryption Standard (DES) and then .docxtheodorelove43763
The document discusses the history of the Data Encryption Standard (DES) and how it transformed cryptography with the development of triple DES. Students are required to post a response to at least two other students by the end of the week using at least one scholarly resource, with all discussion postings in proper APA format.
Evaluate the Health History and Medical Information for Mrs. J.,.docxtheodorelove43763
Evaluate the Health History and Medical Information for Mrs. J., presented below.
Based on this information, formulate a conclusion based on your evaluation, and complete the Critical Thinking Essay assignment, as instructed below.
Health History and Medical Information
Health History
Mrs. J. is a 63-year-old married woman who has a history of hypertension, chronic heart failure, and chronic obstructive pulmonary disease (COPD). Despite requiring 2L of oxygen/nasal cannula at home during activity, she continues to smoke two packs of cigarettes a day and has done so for 40 years. Three days ago, she had sudden onset of flu-like symptoms including fever, productive cough, nausea, and malaise. Over the past 3 days, she has been unable to perform ADLs and has required assistance in walking short distances. She has not taken her antihypertensive medications or medications to control her heart failure for 3 days. Today, she has been admitted to the hospital ICU with acute decompensated heart failure and acute exacerbation of COPD.
Subjective Data
1. Is very anxious and asks whether she is going to die.
2. Denies pain but says she feels like she cannot get enough air.
3. Says her heart feels like it is "running away."
4. Reports that she is exhausted and cannot eat or drink by herself.
Objective Data
1. Height 175 cm; Weight 95.5kg.
2. Vital signs: T 37.6C, HR 118 and irregular, RR 34, BP 90/58.
3. Cardiovascular: Distant S1, S2, S3 present; PMI at sixth ICS and faint: all peripheral pulses are 1+; bilateral jugular vein distention; initial cardiac monitoring indicates a ventricular rate of 132 and atrial fibrillation.
4. Respiratory: Pulmonary crackles; decreased breath sounds right lower lobe; coughing frothy blood-tinged sputum; SpO2 82%.
5. Gastrointestinal: BS present: hepatomegaly 4cm below costal margin.
Intervention
The following medications administered through drug therapy control her symptoms:
1. IV furosemide (Lasix)
2. Enalapril (Vasotec)
3. Metoprolol (Lopressor)
4. IV morphine sulphate (Morphine)
5. Inhaled short-acting bronchodilator (ProAir HFA)
6. Inhaled corticosteroid (Flovent HFA)
7. Oxygen delivered at 2L/ NC
Critical Thinking Essay
In 750-1,000 words, critically evaluate Mrs. J.'s situation. Include the following:
1. Describe the clinical manifestations present in Mrs. J.
2. Discuss whether the nursing interventions at the time of her admissions were appropriate for Mrs. J. and explain the rationale for each of the medications listed.
3. Describe four cardiovascular conditions that may lead to heart failure and what can be done in the form of medical/nursing interventions to prevent the development of heart failure in each condition.
4. Taking into consideration the fact that most mature adults take at least six prescription medications, discuss four nursing interventions that can help prevent problems caused by multiple drug interactions in older patients. Provide a rationale for each of the inte.
Evaluate the environmental factors that contribute to corporate mana.docxtheodorelove43763
Evaluate the environmental factors that contribute to corporate management’s need to manage corporate earnings to align with market expectations, indicating the potential long-term risks to financial performance and sustainability. Why are these factors important in evaluating the financial performance of an organization?
Please provide one citation or reference for your initial posting that is not your textbook.
.
The chapter Lifelines of National Economy in Class 10 Geography focuses on the various modes of transportation and communication that play a vital role in the economic development of a country. These lifelines are crucial for the movement of goods, services, and people, thereby connecting different regions and promoting economic activities.
Gender and Mental Health - Counselling and Family Therapy Applications and In...PsychoTech Services
A proprietary approach developed by bringing together the best of learning theories from Psychology, design principles from the world of visualization, and pedagogical methods from over a decade of training experience, that enables you to: Learn better, faster!
Andreas Schleicher presents PISA 2022 Volume III - Creative Thinking - 18 Jun...EduSkills OECD
Andreas Schleicher, Director of Education and Skills at the OECD presents at the launch of PISA 2022 Volume III - Creative Minds, Creative Schools on 18 June 2024.
This document provides an overview of wound healing, its functions, stages, mechanisms, factors affecting it, and complications.
A wound is a break in the integrity of the skin or tissues, which may be associated with disruption of the structure and function.
Healing is the body’s response to injury in an attempt to restore normal structure and functions.
Healing can occur in two ways: Regeneration and Repair
There are 4 phases of wound healing: hemostasis, inflammation, proliferation, and remodeling. This document also describes the mechanism of wound healing. Factors that affect healing include infection, uncontrolled diabetes, poor nutrition, age, anemia, the presence of foreign bodies, etc.
Complications of wound healing like infection, hyperpigmentation of scar, contractures, and keloid formation.
🔥🔥🔥🔥🔥🔥🔥🔥🔥
إضغ بين إيديكم من أقوى الملازم التي صممتها
ملزمة تشريح الجهاز الهيكلي (نظري 3)
💀💀💀💀💀💀💀💀💀💀
تتميز هذهِ الملزمة بعِدة مُميزات :
1- مُترجمة ترجمة تُناسب جميع المستويات
2- تحتوي على 78 رسم توضيحي لكل كلمة موجودة بالملزمة (لكل كلمة !!!!)
#فهم_ماكو_درخ
3- دقة الكتابة والصور عالية جداً جداً جداً
4- هُنالك بعض المعلومات تم توضيحها بشكل تفصيلي جداً (تُعتبر لدى الطالب أو الطالبة بإنها معلومات مُبهمة ومع ذلك تم توضيح هذهِ المعلومات المُبهمة بشكل تفصيلي جداً
5- الملزمة تشرح نفسها ب نفسها بس تكلك تعال اقراني
6- تحتوي الملزمة في اول سلايد على خارطة تتضمن جميع تفرُعات معلومات الجهاز الهيكلي المذكورة في هذهِ الملزمة
واخيراً هذهِ الملزمة حلالٌ عليكم وإتمنى منكم إن تدعولي بالخير والصحة والعافية فقط
كل التوفيق زملائي وزميلاتي ، زميلكم محمد الذهبي 💊💊
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Decision Theory LEARNING OBJECTIVES SUPPLEMENT OUTLINE 5S..docx
1. Decision Theory
LEARNING OBJECTIVES SUPPLEMENT OUTLINE 5S.5
Decision Making under Uncertainty, 219
After completing this supplement, you 5S.6 Decision Making
under Risk, 220 5S.1 Introduction, 216
should be able to: 5S.7 Decision Trees, 2215S.2 The Decision
Process and Causes of
L05S.1 Outline the steps in the decision Poor Decisions, 217
5S.8 Expected Value of Perfect
process. Information, 2235S.3 Decision Environments, 218
L05S.2 Name some causes of poor 5S.9 Sensitivity Analysis,
224
decisions. 5S.4 Decision Making under Certainty, 218
L05S.3 Describe and use techniques that
apply to decision making under
uncertainty.
L05S.4 Describe and use the expected-
value approach.
L05S.5 Construct a decision tree and use
it to analyze a problem.
L05S.6 Compute the expected value of
perfect information.
L05S.7 Conduct sensitivity analysis on a
simple decision problem.
2. 55.1 INTRODUCTION
-
Decision theory represents a general approach to decision
making. It is suitable for a wide
range of operations management decisions. Among them are
capacity planning, product and
service design, equipment selection, and location planning.
Decisions that lend themselves to
a decision theory approach tend to be characterized by the
following elements:
1. A set of possible future conditions that will have a bearing on
the results of the decision.
2. A list of alternatives for the manager to choose from.
3. A known payoff for each alternative under each possible
future condition.
To use this approach, a decision maker would employ this
process:
1. Identify the possible future conditions (e.g., demand will be
low, medium, or high; the
competitor will or will not introduce a new product). These are
called states of nature.
2. Develop a list of possible alternatives, one of which may be
to do nothing.
t
3. Determine or estimate the payoff associated with each
alternative for every possible
future condition.
3. ---- ----------------------------------------~--
216
217 Supplement to Chapter Five Decision Theory
If possible, estimate the likelihood of each possible future
condition.
5. Evaluate alternatives according to some decision criterion
(e.g., maximize expected
profit), and select the best alternative.
The information for a decision is often summarized in a payoff
table, which shows the
expected payoffs for each alternative under the various possible
states of nature. These tables
are helpful in choosing among alternatives because they
facilitate comparison of alternatives.
Consider the following payoff table, which illustrates a capacity
planning problem.
POSSIBLE FUTURE DEMAND
Alternatives Low Moderate High
Small facility $10* $10 $10
Medium facility 7 12 12
Large facil ity (4) 2 16
'Present value in $ millions.
4. The payoffs are shown in the body of the table. In this instance,
the payoffs are in terms
of present values, which represent equivalent current dollar
values of expected future income
less costs. This is a convenient measure because it places all
alternatives on a comparable
basis. If a small facility is built, the payoff will be the same for
all three possible states of
nature. For a medium facility, low demand will have a present
value of $7 million, whereas
both moderate and high demand will have present values of $12
million. A large facility will
have a loss of $4 million if demand is low, a present value of $2
million if demand is moder-
ate, and a present value of $16 million if demand is high.
The problem for the decision maker is to select one of the
alternatives, taking the present
value into account.
Evaluation of the alternatives differs according to the degree of
certainty associated with
the possible future conditions.
5S.2 THE DECISION PROCESS AND CAUSES
OF POOR DECISIONS
Despite the best efforts of a manager, a decision occasionally
turns out poorly due to unfore-
seeable circumstances. Luckily, such occurrences are not
common. Often, failures can be
traced to a combination of mistakes in the decision process, to
bounded rationality, or to
suboptimization.
5. The decision process consists of these steps:
1. Identify the problem.
2. Specify objectives and criteria for a solution.
3. Develop suitable alternatives.
4. Analyze and compare alternatives.
5. Select the best alternative.
6. Implement the solution.
7. Monitor to see that desired result is achieved.
In many cases, managers fail to appreciate the importance of
each step in the decision-
making process. They may skip a step or not devote enough
effort to completing it before
jumping to the next step. Sometimes this happens owing to a
manager's style of making quick
decisions or a failure to recognize the consequences of a poor
decision. The manager's ego can
be a factor. This sometimes happens when the manager has
experienced a series of successes-
important decisions that turned out right. Some managers then
get the impression that they can
do no wrong. But they soon run into trouble, which is usually
enough to bring them back down
Payoff table Table showing
the expected payoffs for each
alternative in every possible state
of nature.
6. L05S.1 Outline the steps in
the decision process.
L05S.2 Name some causes of
poor decisions.
••
218
Bounded rationality The
limitations on decision making
caused by costs, human abilities,
time, technology, and availability
of information.
Suboptimization The result
of different departments each
attempting to reach a solu-
tion that is optimum for that
department.
Certainty Environment in
which relevant parameters have
known values.
Risk Environment in which cer-
tain future events have probable
outcomes.
Uncertainty Environment in
which it is impossible to assess
the likelihood of various future
7. events.
EXAMPLE
55-1
Supplement to Chapter Five Decision Theory
to earth. Other managers seem oblivious to negative results and
continue the process they
associate with their previous successes, not recognizing that
some of that success may have
been due more to luck than to any special abilities of their own.
A part of the problem may be
the manager's unwillingness. to admit a mistake. Yet other
managers demonstrate an inability
to make a decision; they stall long past the time when the
decision should have been rendered .
Of course, not all managers fall into these traps-it seems safe to
say that the majority
do not. Even so, this does not necessarily mean that every
decision works out as expected.
Another factor with which managers must contend is bounded
rationality, or the limits
imposed on decision making by costs, human abilities, time,
technology, and the availability
of information. Because of these limitations, managers cannot
always expect to reach deci-
sions that are optimal in the sense of providing the best possible
outcome (e.g., highest profit,
least cost). Instead, they must often resort to achieving a
satisfactory solution.
Still another cause of poor decisions is that organizations
typically departmentalize deci-
sions. Naturally, there is a great deal of justification for the use
8. of departments in terms of
overcoming span-of-control problems and human limitations.
However, suboptimization can
occur. This is a result of different departments' attempts to
reach a solution that is optimum
for each. Unfortunately, what is optimal for one department may
not be optimal for the orga-
nization as a whole. If you are familiar with the theory of
constraints (see Chapter 16), subop-
timization and local optima are conceptually the same, with the
same negative consequences.
5S.3 DECISION ENVIRONMENTS
Operations management decision environments are classified
according to the degree of cer-
tainty present. There are three basic categories: certainty, risk,
and uncertainty.
. Certainty means that relevant parameters such as costs,
capacity, and demand have
known values.
Risk means that certain parameters have probabilistic outcomes.
Uncertainty means that it is impossible to assess the likelihood
of various possible future
events.
Consider these situations:
1. Profit per unit is $5. You have an order for 200 units. How
much profit will you make?
(This is an example of certainty since unit profits and total
demand are known.)
2. Profit is $5 per unit. Based on previous experience, there is a
9. 50 percent chance of an
order for 100 units and a 50 percent chance of an order for 200
units. What is expected
profit? (This is an example of risk since demand outcomes are
probabilistic.)
3. Profit is $5 per unit. The probabilities of potential demands
are unknown. (This is an
example of uncertainty.)
The importance of these different decision environments is that
they require different anal-
ysis techniques. Some techniques are better suited for one
category than for others.
5S.4 DECISION MAKING UNDER CERTAINTY
When it is known for certain which of the possible future
conditions will actually happen, the
decision is usually relatively straightforward: Simply choose the
alternative that has the best
payoff under that state of nature. Example 5S-1 illustrates this.
Determine the best alternative in the payoff table on the
previous page for each of-the cases: It
is known with certainty that demand will be (a) low, (b)
moderate, (c) high.
219
'------~
Supplement to Chapter Five Decision Theory
Choose the alternative with the highest payoff. Thus, if we
10. know demand will be low, we
would elect to build the small facility and realize a payoff of :
10 million. If we know demand
will be moderate, a medium factory would yield the highest
payoff ($12 million versus either
$10 million or $2 million). For high demand, a large facility
would provide the highest payoff.
Although complete certainty is rare in such situations, this kind
of exercise provides some
perspective on the analysis. Moreover, in some instances, there
may be an opportunity to con-
sider allocation of funds to research efforts, which may reduce
or remove some of the uncer-
tainty surrounding the states of nature, converting uncertainty
to risk or to certainty.
5S.5 DECISION MAKING UNDER UNCERTAINTY
At the opposite extreme is complete uncertainty: 0 information
is available on how likely
the various states of nature are. Under those conditions, four
possible decision criteria
are maximin, maximax, Laplace, and minimax regret. These
approaches can be defined as
follows:
Maximin-Determine the worst possible payoff for each
alternative, and choose the
alternative that has the "best worst." The maximin approach is
essentially a pessimistic
one because it takes into account only the worst possible
outcome for each alternative.
The actual outcome may not be as bad as that, but this approach
establishes a "guaranteed
minimum."
11. Maximax-Determine the best possible payoff, and choose the
alternative with that pay-
off. The maximax approach is an optimistic, "go for it" strategy;
it does not take into
account any payoff other than the best.
Laplace-Determine the average payoff for each alternative, and
choose the alternative
with the best average. The Laplace approach treats the states of
nature as equally likely.
Minimax regret-Determine the worst regret for each alternative,
and choose the alter-
native with the "best worst." This approach seeks to minimize
the difference between the
payoff that is realized and the best payoff for each state of
nature.
The next two examples illustrate these decision criteria.
Referring to the payoff table on page 217, determine which
alternative would be chosen under
each of these strategies:
a. Maximin
b. Maximax
c. Laplace
a. Using maximin, the worst payoffs for the alternatives are as
follows:
Small facility: $10 million
Medium facility: 7 million
12. Large facility: -4 million
Hence, since $10 million is the best, choose to build the small
facility using the maximin
strategy.
b. Using maximax, the best payoffs are as follows:
Small facility: $10 million
Medium facility: 12 million
Large facility: 16 million
The best overall payoff is the $16 million in the third row.
Hence, the maximax criterion
leads to building a large facility.
SOLUTION
L05S.3 Describe and use
techniques that apply to deci-
sion making under uncertainty.
Maximin Choose the alterna-
tive with the best of the worst
possible payoffs.
Maximax Choose the alter-
native with the best possible
payoff.
Laplace Choose the alternative
with the best average payoff of
any of the alternatives.
Minimax regret Choose the
13. alternative that has the least of
the worst regrets.
EXAMPLE
5S-2
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SOLUTION
220
I #
EXAMPLE
5S-3
SOLUTION
Regret (opportunity loss)
The differencebetween a given
payoff and the best payoff for a
state of nature.
L05S.4 Describe and use the
expected-value approach.
Expected monetary value
(EMV) criterion The best
expected value among the
alternatives.
Supplement to Chapter Five Decision Theory
14. c. For the Laplace criterion, first find the row totals, and then
divide each of those amounts
by the number of states of nature (three in this case). Thus, we
have
Row Total
(in $ millions)
Row Average
(in $ millions)
Small facility
Medium facility
Large facility
$30
31
14
$10.00
10.33
4.67
Because the medium facility has the highest average, it would
be chosen under the Laplace
criterion.
Determine which alternative would be chosen using a minimax
regret approach to the capac-
ity planning program.
The first step in this approach is to prepare a table of regrets (or
opportunity losses). To do
15. this, subtract every payoff in each column from the best payoff
in that column. For instance,
in the first column, the best payoff is 10, so each of the three
numbers in that column must be
subtracted from 10. Going down the column, the regrets will be
10 - 10 = 0, 10 - 7 = 3, and
10 - (-4) = 14. In the second column, the best payoff is 12.
Subtracting each payoff from
12 yields 2, 0, and 10. In the third column, 16 is the best
payoff. The regrets are 6, 4, and 0.
These results are summarized in a regret table:
REGRETS (IN $ MILLIONS)
Alternatives Low Moderate High Worst
,Small facility $0 $2 $6 $6
Medium facility 3 0 4 4
Large facility 14 10 0 14
The second step is to identify the worst regret for each
alternative. For the first alternative,
the worst is 6; for the second, the worst is 4; and for the third,
the worst is 14.
The best of these worst regrets would be chosen using minimax
regret. The lowest regret is
4, which is for a medium facility. Hence, that alternative would
be chosen.
Solved Problem 6 at the end of this supplement illustrates
decision making under uncer-
tainty when the payoffs represent costs.
The main weakness of these approaches (except for Laplace) is
that they do not take into
16. account all of the payoffs. Instead, they focus on the worst or
best, and so they lose some
information. Still, for a given set of circumstances, each has
certain merits that can be helpful
to a decision maker.
5S.6 DECISION MAKING UNDER RISK
Between the two extremes of certainty and uncertainty lies the
case of risk: The probability
of occurrence for each state of nature is known. (Note that
because the states are mutually
exclusive and collectively exhaustive, these probabilities must
add to 1.00.) A widely used
approach under such circumstances is the expected monetary
value criterion. The expected
value is computed for each alternative, and the one with the best
expected value is selected.
The expected value is the sum of the payoffs for an alternative
where each payoff is weighted
by the probability for the relevant state of nature. Thus, the
approach is
Expected monetary value (EMV) criterion-Determine the
expected 'payoff or each
alternative, and choose the alternative that has the best expected
payoff.
Supplement to Chapter Five Decision Theory
Using the expected monetary value criterion, identify the best
alternative for the previous
payoff table for these probabilities: low = .30, moderate = .50,
and high = .20.
17. Find the expected value of each alternative by multiplying the
probability of occurrence for
each state of nature by the payoff for that state of nature and
summing them:
= .30($10)
= .30($7)
= .30($-4)
EVsmall
EVmedium
EVlarge
.50($10)
.50($12)
.50($2)
+ .20($10) = $10
.20($12) = $10.5
.20($16) = $3
+
+
+
+
+
Hence, choose the medium facility because it has the highest
expected value.
The expected monetary value approach is most appropriate
18. when a decision maker is nei-
ther risk averse nor risk seeking, but is risk neutral. Typically,
well-established organizations
with numerous decisions of this nature tend to use expected
value because it provides an indi-
cation of the long-run, average payoff. That is, the expected-
value amount (e.g., $10.5 million
in the last example) is not an actual payoff but an expected or
average amount that would be
approximated if a large number of identical decisions were to be
made. Hence, if a decision
maker applies this criterion to a large number of similar
decisions, the expected payoff for the
total will approximate the sum of the individual expected
payoffs.
55.7 DECISION TREES
In health care the array of treatment options and medical costs
makes tools such as decision
trees particularly valuable in diagnosing and prescribing
treatment plans. For example, if a
20-year-old and a 50-year-old both are brought into an
emergency room complaining of chest
pains, the attending physician, after asking each some questions
on family history, patient his-
tory, general health, and recent events and activities, will use a
decision tree to sort through
the options to arrive at the appropriate decision for each patient.
Decision trees are tools that have many practical applications,
not only in health care but
also in legal cases and a wide array of management decision
making, including credit card
fraud; loan, credit, and insurance risk analysis; decisions on
new product or service develop-
ment; and location analysis.
19. A decision tree is a schematic representation of the alternatives
available to a decision
maker and their possible consequences. The term gets its name
from the treelike appearance
of the diagram (see Figure 5S.1). Although tree diagrams can be
used in place of a payoff
Payoff 1
Payoff 2
>-,
~e
°CJ",o
Payoff 3
Initial
decision
Payoff 4
C-?
00
6'(9
~ Payoff 5
Payoff 6
• Decision point o Chance event
221
EXAMPLE
55-4
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l05S.5 Construct a decision
tree and use it to analyze a
problem.
Decision tree A schematic
representation of the available
alternatives and their possible
consequences.
FIGURE 5S.1
Format of a decision tree
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222
EXAMPLE
55-5
SOLUTION
Supplement to Chapter Five Decision Theory
table, they are particularly useful for analyzing situations that
involve sequential decisions.
For instance, a manager may initially decide to build a small
facility only to discover that
demand is much higher than anticipated. In this case, the
manager may then be called upon to
make a subsequent decision on whether to expand or build an
additional facility.
21. A decision tree is composed of a number of nodes that have
branches emanating from them
(see Figure 5S.1). Square nodes denote decision points, and
circular nodes denote chance
events. Read the tree from left to right. Branches leaving square
nodes represent alternatives;
branches leaving circular nodes represent chance events (i.e.,
the possible states of nature).
After the tree has been drawn, it is analyzed from right to left;
that is, starting with the
last decision that might be made. For each decision, choose the
alternative that will yield the
greatest return (or the lowest cost). If chance events follow a
decision, choose the alternative
that has the highest expected monetary value (or lowest
expected cost).
A manager must decide on the size of a video arcade to
construct. The manager has narrowed
the choices to two: large or small. Information has been
collected on payoffs, and a decision
tree has been constructed. Analyze the decision tree and
determine which initial alternative
(build small or build large) should be chosen in order to
maximize expected monetary value.
o ./;' $40
{'O~
N'l
0e
..0
22. ,,~~ $40
~0'V.
)0
Overtime $50
E:'JrIJ
Cillo
$55
,,~~ ($10)
~0'V.
)0
o ./;'
{'O~
Reo.
N'l
0e..0 liCe
IJric $50es
High
oerr,
Cillo $70(.6)
S,..
"110-:ge
The dollar amounts at the branch ends indicate the estimated
payoffs if the sequence of
chance events and decisions that is traced back to the initial
decision occurs. For example, if
the initial decision is to build a small facility and it turns out
23. that demand is low, the payoff
will be $40 (thousand). Similarly, if a small facility is built,
demand turns out high, and a later
decision is made to expand, the payoff will be $55 (thousand).
The figures in parentheses on
branches leaving the chance nodes indicate the probabilities of
those states of nature. Hence,
the probability of low demand is .4, and the probability of high
demand is .6. Payoffs in
parentheses indicate losses.
Analyze the decisions from right to left:
1. Determine which alternative would be selected for each
possible second decision. For a
small facility with high demand, there are three choices: do
nothing, work overtime, and
expand. Because expand has the highest payoff, you would
choose it. Indicate this by
placing a double slash through each of the other alternatives.
Similarly, for a large facility
with low demand, there are two choices: do nothing and reduce
prices'Xcsa would choose
reduce prices because it has the higher expected value, so a
double slash is placed on the
other branch.
Supplement to Chapter Five Decision Theory 223
Determine the product of the chance probabilities and their
respective payoffs for the
remaining branches:
Build small
24. Low demand .4($40) = $16
High demand .6($55) = $33
Build large
Low demand .4($50) = 20
High demand .6($70) = $42
Determine the expected value of each initial alternative:
Build small $16 + $33 = $49
Build large $20 + $42 = .62
Hence, the choice should be to build the large facility because it
has a larger expected
value than the small facility .
.8 EXPECTED VALUE OF PERFECT
INFORMATION
certain situations, it is possible to ascertain which state of
nature will actually occur in the
e. For instance, the choice of location for a restaurant may
weigh heavily on whether a
- . highway will be constructed or whether a zoning permit will
be issued. A decision maker
have probabilities for these states of nature; however, it may be
possible to delay a deci-
until it is clear which state of nature will occur. This might
involve taking an option to
_.; the land. If the state of nature is favorable, the option can be
exercised; if it is unfavorable,
option can be allowed to expire. The question to consider is
25. whether the cost of the option
ill be less than the expected gain due to delaying the decision
(i.e., the expected payoff
ve the expected value). The expected gain is the expected value
of perfect information,
EVPI.
Other possible ways of obtaining perfect information depend
somewhat on the nature of
- decision being made. Information about consumer preferences
might come from market
ch, additional information about a product could come from
product testing, or legal
rts might be called on.
There are two ways to determine the EVPL One is to compute
the expected payoff under
enainty and subtract the expected payoff under risk. That is,
Expected value of Expected payoff Expected payoff (5S-1)
perfect information under certainty under risk
"':-singthe information from Example 5S-4, determine the
expected value of perfect informa-
n using Formula 5S-1.
-=- t, compute the expected payoff under certainty. To do this,
identify the best payoff under
h state of nature. Then combine these by weighting each payoff
by the probability of that
e of nature and adding the amounts. Thus, the best payoff under
low demand is $10, the
t under moderate demand is 12, and the best under high demand
26. is $16. The expected
yoff under certainty is, then,
.30($10) + .50($12) + .20($16) = $12.2
L05S.6 Compute the expected
value of perfect information.
Expected value of perfect
information (EVPI) The
difference between the expected
payoff with perfect information
and the expected payoff
under risk.
EXAMPLE
5S-6
SOLUTION #
224
I~
EXAMPLE
5S-7
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SOLUTION
Ul5S.7 Conduct sensitivity
27. analysis on a simple decision
problem.
Sensitivity analysis Deter-
mining the range of probability
for which an alternative has the
best expected payoff.
EXAMPLE
5S-8
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SOLUTION
Supplement to Chapter Five Decision Theory
The expected payoff under risk, as computed in Example 5S--4,
is $10.5. The EVPI is the dif-
ference between these:
EVPI = $12.2 - $10.5 = $1.7
This figure indicates the upper limit on the amount the decision
maker should be willing
to spend to obtain perfect information in this case. Thus, if the
cost equals or exceeds this
amount, the decision maker would be better off not spending
additional money and simply
going with the alternative that has the highest expected payoff.
A second approach is to use the regret table to compute the
EVPI. To do this, find the
expected regret for each alternative. The minimum expected
regret is equal to the EVPI.
28. Determine the expected value of perfect information for the
capacity-planning problem using
the expected regret approach.
Using information from Examples 5S-2, 5S-3, and 5S--4, we can
compute the expected regret
for each alternative. Thus: '
Small facility
Medium facility
Large facility
+ .20(6) = 2.2
+ .20(4) = 1.7 [minimum]
+ .20(0) = 9.2
.30(0)
.30(3)
.30(14)
+ .50(2)
+ .50(0)
+ .50(10)
The lowest expected regret is l.7, which is associated with the
second alternative. Hence, the
EVPI is $l.7 million, which agrees with the previous example
using the other approach.
5S.9 SENSITIVITY ANALYSIS
Generally speaking, both the payoffs and the probabilities in
this kind of a decision problem
are estimated values. Consequently, it can be useful for the
29. decision maker to have some
indication of how sensitive the choice of an alternative is to
changes in one or more of these
values. Unfortunately, it is impossible to consider all possible
combinations of every variable
in a typical problem. Nevertheless, there are certain things a
decision maker can do to judge
the sensitivity of probability estimates.
Sensitivity analysis provides a range of probability over which
the choice of alternatives
would remain the same. The approach illustrated here is useful
when there are two states of
nature. It involves constructing a graph and then using algebra
to determine a range of prob-
abilities for which a given solution is best. In effect, the graph
provides a visual indication
of the range of probability over which the various alternatives
are optimal, and the algebra
provides exact values of the endpoints of the ranges. Example
5S-8 illustrates the procedure .•.•.
Given the following table, determine the range of probability
for state of nature #2, that is,
P(2), for which each alternative is optimal under the expected-
value approach.
STATE OF
NATURE
#1 #2
A 4 12
Alternative B 16 2
C 12 8
30. First, plot each alternative relative to P(2). To do this, plot the
#1 value on the left side of the
graph and the #2 value on the right side. For instance, for
alternative A, plot 4 on the left side
of the graph and 12 on the right side. Then connect these two
points with a straight line. The
three alternatives are plotted on the graph as shown on the next
page.
Supplement to Chapter Five Decision Theory 225
16 16
14
12
10
#2
8 Payoff
6
4
2
.8 1.0
14
12
31. 10
#1
Payoff 8
6 I
I
4 I
I
2 I
--B best--~C best-i~--
o .2 .4 .6
P(2)
The graph shows the range of values of P(2) over which each
alternative is optimal. Thus,
low values of P(2) [and thus high values of P(l), since P(l) +
P(2) = 1.0], alternative B
have the highest expected value; for intermediate values of
P(2), alternative C is best; and
higher values of P(2), alternative A is best.
To find exact values of the ranges, determine where the upper
parts of the lines intersect.
e that at the intersections, the two alternatives represented by
the lines would be equivalent
terms of expected value. Hence, the decision maker would be
indifferent between the two
:nat point. To determine the intersections, you must obtain the
equation of each line. This
relatively simple to do. Because these are straight lines, they
have the form y = a + bx,
32. - e a is the y-intercept value at the left axis, b is the slope of the
line, and x is P(2). Slope
fined as the change in y for a one-unit change in x. In this type
of problem, the distance
'een the two vertical axes is 1.0. Consequently, the slope of
each line is equal to the right-
value minus the left-hand value. The slopes and equations are as
follows:
#1 #2 Slope Equation
4 12 12 - 4 = + 8 4 + 81'1:2)
16 2 2 -16 = -14 16 - 141'1:2)
12 8 8-12=- 4 12-41'1:2)
From the graph, we can see that alternative B is best from P(2)
5 0 to the point where that
ight line intersects the straight line of alternative C, and that
begins the region where C is
r. To find that point, solve for the value of P(2) at their
intersection. This requires setting
two equations equal to each other and solving for P(2). Thus,
16 - 14P(2) = 12 - 4P(2)
Rearranging terms yields
4 = lOP(2)
olving yields P(2) = AO. Thus, alternative B is best from P(2) =
0 up to P(2) = AO. B
C are equivalent at P(2) = AO.
Alternative C is best from that point until its line intersects
33. alternative A's line. To find that
ection, set those two equations equal and solve for P(2). Thus,
+ 8P(2) = 12 - 4P(2)
Rearranging terms results in
12P(2) = 8
olving yields P(2) = .67. Thus, alternative C is best from P(2) >
AO up to P(2) = .67,
re A and C are equivalent. For values of P(2) greater than .67 up
to P(2) = 1.0, A is best.
. ote: If a problem calls for ranges with respect to P(l), find the
P(2) ranges as above, and
subtract each P(2) from 1.00 (e.g., AO becomes .60, and .67
becomes .33).
226
SUMMARY
.. "
KEY TERMS
SOLVED PROBLEMS
Problem 1
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