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Problem Formulation (Pgs. 612-615). You work for an engineering firm, with expertise in Decision Analysis, tasked to provide a demonstration for your firm's client, a major land development company in the Detroit area. They are considering (2) options for lakefront development of high-end communities: (50) single, 2-story units ($950,000 each) and (75) duplex 2-story units ($800,000 each). They want a demonstration of how Decision Analysis can help their decision-making in which option to select.
From a preliminary standpoint, the logistics are: 1) Problem Statement; 2) Decision Alternatives; 3) Chance Events; 4) Consequences. To accomplish this, develop an Influence Diagram with nodes (decision, chance, and consequence), arcs, and a Payoff Table (see MS Word attachment for templates). Discuss the steps and outcomes in MS Word, with your own example not found in the text. Include your diagrams.
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