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Dr. Mac, a surgeon, must decide what mode of treatment to use on Mr. Samuels. There are three modes of treatment: Mode A, B, and C; and three possible states of nature: 1.Treatment succeeds and patient leads a normal life, 2. Patient survives treatment but is permanently disabled, and 3. Patient fails to survive treatment. Dr. Mac has prepared the decision table below. What mode of treatment maximizes the expected value?
a. Mode A
b. Mode B
c. Mode C
d. All three treatments are equally desirable.
e. Normal Life
As CEO, would you try to predict the cycles to maximize the ROI on building new hotels? It takes 2-3 years to build a hotel and another 5-10 to begin earning an ROI.
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Think of all the examples of forecasting you experience on a regular basis; such as the weatherman on TV each night.
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