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As a business owner faced with an important decision that could potentially be very lucrative. Keep in mind the "Six Steps in Decision Making" when set up your decision analysis.
1. What is the problem and objective of this decision?
2. Identify at least three alternatives and three states of nature.
3. Create a decision table in Excel QM. See video in Live Binder.
4. What are the potential payoff/losses for each alternative and state of nature?
5. Choose two of the five decision strategies, and solve it in Excel QM. State the best alternative for each strategy.
Optimistic
Pessimistic
Criterion of realism (Hurwicz)
Equally likely (Laplace)
Minimax regret
Why did you choose the two strategies? What are the results of the best alternative? What is your final decision?
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You are the CEO of a small electronics manufacturing firm that is about to develop a global strategy.
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Initial greeting of thanks to your supervisor for being collaborative and supportive - General overview of how the project is proceeding
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