Posted: August 25th, 2021
Hamoud Midterm
Student’s Name
Institutional Affiliation
Hamoud midterm
Question 1: Deterministic versus Probabilistic Model
The deterministic model refers to a mathematical model whose purpose is to give a single solution when describing the results of an ‘experiment’ following the right input. On the other hand, the probabilistic model has established yield distribution of different possible results from an ‘experiment’ given specific inputs. Mainly, the model describes all possible outcomes while giving the likelihood of the occurrence of each outcome.
Question 2: Garbage in, Garbage Out (GIGO)
The GIGO concept is commonly associated with computers and mathematics. The concept implies that the type of input that is fed into a system determines the quality of output that the model or system will yield. Thus, improperly stating a mathematical model eventually yielding wrong results. Further, when the right model is fed with wrong figures, it would give the wrong information.
Question 3: Break-even Calculations
Fixed costs
Total costs = $375 per 3 hours
Price
Variable costs
Therefore, break-even enrollment units = $375/$(60-15) = 8 students per session.
Break-even point = $275/ $(60-15) = 6 students per session. Hence, reducing rental costs to $200 per three hours lowers the break-even number of attendances.
Question 4
Parallel system, pf = 1 – g(FR2-3) = 0.99
Probability that the system fails = 0.99*2.7 x 106 = 2.6 x 106
Question 5
P(F|D=0) = 0.9 P(F|D=1) =0.8 P(F|D=0) = 0.7 P(8F|D=3) =0.4
P(U|D=0) = 0.2 P(U|D=1) = 0.7 P(U|D=2) = 0.9 P(F|D=3) = 0.6
P (F/U|D = 0) = 0.9*0.2 = 0.18, P (F/U|D = 1) =0.8*0.7 = 0.56, P (F/U|D =0, 2) = 0.7*0.9 = 0.63, P (F/U|D = 3) = 0.4*0.6 = 0.24
Customers’ Attitude | ||||||||||||
P (F=favorable) | P(U=unfavorable) | P (N=no opinion) | ||||||||||
Probabilities | P(F|D=0) = 0.9 | P(F|D=1) =0.8 | P(F|D=0) = 0.7 | P(F|D=0) = 0.7 | P(U|D=0) = 0.1 | P(U|D=1) =0.2 | P(U|D=0) = 0.3 | P(U|D=0) = 0.3 | P(N|D=0) = 0.2 | P(N|D=1) =0.9 | P(N|D=0) = 0.9 | P(N|D=0) = 0.6 |
Payoffs | 0.9*0.4+0.8*0.3+0.7*0.2+0.7*0.1 = 0.81 | 0.1*0.4+0.2*0.3+0.3*0.2+0.1*0.3 = 0.19 | 0.2*0.4+0.3*0.9+0.2*0.9+0.1*0.6 = 0.59 | |||||||||
To calculate EMV, the formula used is as follows;
EMV = probability x impact, in this case, thee impact is the payoffs attributed to each decision. Hence, EMV is; 0.81*4= 3.24=> favorable, 0.19*3=0.57 => unfavorable, 0.59*1=0.59 for no opinion.
The highest earned value is 3.24. The figure represents the highest returns of the undertaken decision. Hence, favorable is the best decision that should be made. The results imply that the product has a positive attitude from the customers.
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