Task 2 Decisions under risk

German Camilo Castro Londoño

Universidad Nacional Abierta y a Distancia

Teoria de las decisiones
JESUS DAVID MOSCOTE GUILLEN

Ibagué, Tolima
23 de abril de 2023
Optimal solution for production strategy: The pr
for Toyamik new line of home and garden tractors h
management is trying to decide the appropriate mar
for this product. Three main alternatives are being c
cautious. The administration decides to classify the
weak, stable or strong. Table 1 shows the earnings a
probabilities made by the marketing management:
ESTRATEGIA DE
PRODUCCIÓN
(NODO 1)
 trategy: The product design and testing phase
garden tractors has just been completed. Top
appropriate marketing and production strategy
ives are being considered: aggressive, basic,
s to classify the demand of the product as
ws the earnings and the estimation of the
management:

PROBABILIDAD INGRESOS

DEBIL 0.25 30

AGRESIVA
ESTABLE 0.4 12
NODO 2
 NODO 2

9.5
FUERTE 0.35 -8

DEBIL 0.25 20

BASICA
NODO 2 ESTABLE 0.4 9
NODO 3
11.05

FUERTE 0.35 7

DEBIL 0.25 5

ESTABLE 0.4 8
NODO 4
PRECAVIDO

9.7 FUERTE 0.35 15

Según el responsable del departamento de

investigacion y desarrollo, la estrategia que se debe
de utilizar es la numero 2 con una utilidad de 11,05
INGRESOS P*I VEsIP

30 7.5

12 4.8 9.5
-8 -2.8

20 5

9 3.6 11.05

7 2.45

5 1.25

8 3.2 9.7

15 5.25
VEcIP
11.05
 Exercise 2. Expected

Table 2. Optimal solution to produce a product:

Demand

Decision Demand low - Low average -

alternative utility utility

Manufacture 782 912

Subcontract 777 911

Buy 757 913

Make 744 977

Probabilities ∑ =
0.23 0.17
1

827.1 797.03
179.86 166.09

MANUFACTURE DEMANDA BAJA

NODO 2 DEMANDA MEDIA - BAJA

DEMANDA MEDIA - ALTA

 DEAMANDA ALTA

SUBCONTRACT DEMANDA BAJA

NODO 3 DEMANDA MEDIA - BAJA

DEMANDA MEDIA - ALTA

DEAMANDA ALTA

BUY DEMANDA BAJA

NODO 4 DEMANDA MEDIA - BAJA

DEMANDA MEDIA - ALTA

DEAMANDA ALTA

MAKE DEMANDA BAJA

NODO 5 DEMANDA MEDIA - BAJA

DEMANDA MEDIA - ALTA

DEAMANDA ALTA
 Exercise 2. Expected Value – EVPI and EVMI

to produce a product:
and

Demand High High - demand

medium - utility utility

712 972
652 941
Get into the campus, on the left side of the cours
697 960 number of your group in the participants section, if
your tutor.

In case of typing the group number in the wrong

740 941 random data.

0.35 0.25

813.27 831.46 831.46 VEEsIP

259 243 847.95 VEcIP
16.49 VEIP

ESTADOS DE LA PAGOS POR

PAGOS
NATURALEZA PROBABILIDAD

PROBABILIDAD / UTILIDAD DE ACUERDO A MULTIPLICACION

VE POR NODO
OCURRENCIA LA DEMANDA C/CATEGORIA

0.23 782 179.86

0.17 912 155.04

827.1
0.35 712 249.2
 827.1

0.25 972 243

0.23 777 178.71

0.17 911 154.87

797.03
0.35 652 228.2

0.25 941 235.25

0.23 757 174.11

0.17 913 155.21

813.27
0.35 697 243.95

0.25 960 240

0.23 744 171.12

0.17 977 166.09

831.46
0.35 740 259

0.25 941 235.25

ANALISIS DE LA
INFORMACION
 Rucht mechanical and ele
company that manufactur
components for the introd
product catalog, must dec
manufacture a new produ
Group plant, subcontract it with
62 supervision, if it buys it fr
mpus, on the left side of the course you will be able to consult the o it make in a external cou
group in the participants section, if you have any doubts, check with
profits depend on the dem
ng the group number in the wrong way, it will generate the wrong product. In the annex 1, th
projected profits, in millio

VALOR ESPERADO SIN VALOR ESPERADO CON VALOR ESPERADO DE LA

INFORMACION PERFECTA INFORMACION PERFECTA INFORMACION PERFECTA

VEsIP VEcIP VEIP

 831.46 847.95 16.49

16,49 es la cuota mas

Según el VEsSIP debemos Según el VEsSIP debemos
alta que estamos
trabajar solamente con la trabajar solamente con la
dispuestos a pagar por la
alternativa del nodo:5 alternativa del nodo 5
informacion perfecta
 mechanical and electronic, a
ny that manufactures electronic
onents for the introduction in its
ct catalog, must decide whether to
acture a new product in its main
subcontract it with company
ision, if it buys it from an supplier
ake in a external country. The
depend on the demand of the
ct. In the annex 1, the table 2 shows
ted profits, in millions of dollars.
 Optimal solution for the harvest:
establish a new farm. Management
for beer production, blonde, red, b
the product. In the annex 1 table

Table

Decision alternative

Blonde
Red
Black
Pink

Probabilities ∑ = 1
conditional probabilities
(Favorable)
conditional probabilities
(Unfavorable)

BLONDE
 NODO 2
206.5

RED
NODO 3
175.05
NODO 1
BLACK
NODO 4
184.8

PINK
NODO 5
182.55

FAVORABLE

ESATADO DE LA NATURALEZA PROBABILIDADES PREVIAS

LOW DEMAND 0.35

AVERAGE LOW DEMAND 0.2
AVERAGE HIGH DEMAND 0.25
HIGH DEMAND 0.2

FAVORABLE
ESATADO DE LA NATURALEZA PROBABILIDADES PREVIAS

LOW DEMAND 0.35

AVERAGE LOW DEMAND 0.2
AVERAGE HIGH DEMAND 0.25
HIGH DEMAND 0.2

NODO 2 FAVORABLE
PROBABILIDAD 210,1930185 NODO 4

210.193018480493

NODO 5

180.023613963039

NODO 6

188.94250513347
 NODO 7

186.719712525667

NODO 1

206.5 NODO 3 FAVORABLE

PROBABILIDAD = 202,994152 NODO 8

202.994152046784

NODO 9

170.328460038986

NODO 10

180.867446393762

NODO 11

178.591617933723

VEIM=[VEcIM - VEsIM]
 VEcIM = RESULTADO DEL NODO 1 =
VEsIM = VEsIP =

VEIM = 0

EIM= #DIV/0!
 Optimal solution for the harvest: the Duffer brewery recently purchased land to
establish a new farm. Management must decide which varieties of barley to harvest
for beer production, blonde, red, black, and pink. Profits depend on the demand for
the product. In the annex 1 table 3 shows the projected earnings, in millions of
dollars.

Exercise 3. Decision tree and expected Value – EVPI and EVMI

Table 3. Decision process for the harvest

Low demand Average low Demand Average High Demand

187 207 217

151 170 188
161 169 209
163 175 194

0.35 0.2 0.25

P(F/L) P(F/AL) P(F/AH)
0.35 0.54 0.45
P(U/L) P(U/AL) P(U/AH)
0.65 0.46 0.55

ESTADOS DE LA NATURALEZA PAGOS

UTILIDAD DE ACUERDO A LA
PROBABILIDAD / OCURRENCIA
DEMANDA
LOW DEMAND 0.35 187
 AVERAGE LOW DEMAND 0.2 207
AVERAGE HIGH DEMAND 0.25 217
HIGH DEMAND 0.2 227
LOW DEMAND 0.35 151
AVERAGE LOW DEMAND 0.2 170
AVERAGE HIGH DEMAND 0.25 188
HIGH DEMAND 0.2 206
LOW DEMAND 0.35 161
AVERAGE LOW DEMAND 0.2 169
AVERAGE HIGH DEMAND 0.25 209
HIGH DEMAND 0.2 212
LOW DEMAND 0.35 163
AVERAGE LOW DEMAND 0.2 175
AVERAGE HIGH DEMAND 0.25 194
HIGH DEMAND 0.2 210

FAVORABLE

PROBABILIDADES
PROBABILIDADES CONDICIONALES PROBABILIDADES CONJUNTAS
POSTERIORES P
P(FAVORABLE/0) P(AFAVORABLE n O)
(O/AFAVORABLE)

0.35 0.1225 0.251540041067762

0.54 0.108 0.2217659137577
0.45 0.1125 0.231006160164271
0.72 0.144 0.295687885010267
P(Afavorable) 0.487

FAVORABLE
 PROBABILIDADES
PROBABILIDADES CONDICIONALES PROBABILIDADES CONJUNTAS
POSTERIORES P
P(FAVORABLE/0) P(AFAVORABLE n O)
(O/AFAVORABLE)
0.65 0.2275 0.443469785575049
0.46 0.092 0.179337231968811
0.55 0.1375 0.268031189083821
0.28 0.056 0.10916179337232
P(Afavorable) 0.513

PROBABILIDADES
DEMANDA
POSTERIORES
LOW DEMAND 0.251540041067762
AVERAGE LOW DEMAND 0.2217659137577
BLONDE
AVERAGE HIGH DEMAND 0.231006160164271
HIGH DEMAND 0.295687885010267

PROBABILIDADES
DEMANDA
POSTERIORES
LOW DEMAND 0.251540041067762
AVERAGE LOW DEMAND 0.2217659137577
RED
AVERAGE HIGH DEMAND 0.231006160164271
HIGH DEMAND 0.295687885010267

PROBABILIDADES
DEMANDA
POSTERIORES
LOW DEMAND 0.251540041067762
AVERAGE LOW DEMAND 0.2217659137577
BLACK
AVERAGE HIGH DEMAND 0.231006160164271
HIGH DEMAND 0.295687885010267
 PROBABILIDADES
DEMANDA
POSTERIORES
LOW DEMAND 0.251540041067762
AVERAGE LOW DEMAND 0.2217659137577
PINK
AVERAGE HIGH DEMAND 0.231006160164271
HIGH DEMAND 0.295687885010267

PROBABILIDADES
DEMANDA
POSTERIORES
LOW DEMAND 0.443469785575049
AVERAGE LOW DEMAND 0.179337231968811
BLONDE
AVERAGE HIGH DEMAND 0.268031189083821
HIGH DEMAND 0.10916179337232

PROBABILIDADES
DEMANDA
POSTERIORES
LOW DEMAND 0.443469785575049
AVERAGE LOW DEMAND 0.179337231968811
RED
AVERAGE HIGH DEMAND 0.268031189083821
HIGH DEMAND 0.10916179337232

PROBABILIDADES
DEMANDA
POSTERIORES
LOW DEMAND 0.443469785575049
AVERAGE LOW DEMAND 0.179337231968811
BLACK AVERAGE HIGH DEMAND 0.268031189083821
HIGH DEMAND 0.10916179337232

PROBABILIDADES
DEMANDA
POSTERIORES
LOW DEMAND 0.443469785575049
AVERAGE LOW DEMAND 0.179337231968811
PINK
AVERAGE HIGH DEMAND 0.268031189083821
HIGH DEMAND 0.10916179337232
 206.5
206.5

LA INFLUENCIA DE LA INVESTIGACION DE MERCADOS NO FUE RELEVANTE YA QUE NO AUMENTA LA UTILIDAD

ue – EVPI and EVMI

Group
High demand
number

227 62
will be able to consult the number of your group in the
206 participants section, if you have any doubts, check with
In case of typing the group number in the wrong way,
212 it will generate the wrong random data.
210

0.2
P(F/H)
0.72
P(U/H)
0.28

VALOR VALOR
ESPERADO SIN ESPERADO CON
PAGOS POR PROBABILIDAD
INFORMACION INFORMACION
PERFECTA PERFECTA

MULTIPLICACION
VE POR NODO VEsIP VEcIP
C/CATEGORIA
65.45
206.5
 41.4
206.5
54.25
45.4
52.85
34
175.05
47
41.2
206.5 206.5
56.35
33.8
184.8
52.25
42.4
57.05
35
182.55
48.5
42

Según el VEsSIP Según el VEsSIP

debemos debemos
trabajar trabajar
ANALISIS DE LA INFORMACION
solamente con solamente con
la alternativa la alternativa
del nodo:5 del nodo 5
ESTADOS DE LA NATURALEZA VE NODO 4 VE NODO 2 VE NODO 1

187
207
210.193018480493
217
227

ESTADOS DE LA NATURALEZA
151
170
180.023613963039
188
206

210.19301848
ESTADOS DE LA NATURALEZA
161
169
188.94250513347
209
212
ESTADOS DE LA NATURALEZA
163
175
186.719712525667
194
210

206.5
ESTADOS DE LA NATURALEZA VE NODO 4 VE NODO 2
187
207
202.994152046784
217
227

ESTADOS DE LA NATURALEZA
151
170
170.328460038986
188
206

202.994152047
ESTADOS DE LA NATURALEZA
161
169
209 180.867446393762
212

ESTADOS DE LA NATURALEZA
163
175
178.591617933723
194
210
E NO AUMENTA LA UTILIDAD
 e number of your group in the
ou have any doubts, check with
oup number in the wrong way,
g random data.

VALOR
ESPERADO DE
LA
INFORMACION
PERFECTA

VEIP
 0

16,49 es la
cuota mas alta
que estamos
dispuestos a
pagar por la
informacion
perfecta
 Table 4. Decision p

Decision alternative
1 lot order
2 lot order
3 lot order

Probabilities ∑ = 1

conditional probabilities (Favorable)

conditional probabilities
(Unfavorable)

1 LOT ORDER

622

2 LOT ORDER
NODO 1

644.5
 NODO 1

644.5

3 LOT ORDER

632

FAVORABLE

ESATADO DE LA NATURALEZA PROBABILIDADES PREVIAS

Low demand 0.25

Average Demand 0.35

High demand 0.4

UNFAVORABLE

ESATADO DE LA NATURALEZA PROBABILIDADES PREVIAS

Low demand 0.55

Average Demand 0.36
High demand 0.65
 NODO 2 FAVORABLE PROBABILIDAD
210,1930185 NODO 4
632.181043663472

NODO 5
689.795527156549

NODO 6

701.190628328009

NODO 1

821.3074 NODO 3 UNFAVORABLE PROBABILIDAD

210,1930185 NODO 7
629.41621311945

NODO 8
683.097106846176
 NODO 9

704.810083070754

VEIM=[VEcIM - VEsIM]

VEcIM = RESULTADO DEL NODO 1 =

VEsIM = VEsIP =

VEIM = 176.8074

EIM= 119.869423728814
 Exercise 4. Decision tree and expected Value – EVPI and EVMI

Table 4. Decision process to purchase a seasonal product

Low demand Average Demand

662 662
862 812
1062 862

0.25 0.35
P(F/L) P(F/A)

0.45 0.62
P(U/L) P(U/A-L)

0.55 0.38

1 LOT ORDER

NODO 2 Low demand

Average Demand

High demand

2 LOT ORDER
NODO 3 Low demand
 Average Demand
High demand
3 LOT ORDER
NODO 4 Low demand
Average Demand
High demand

FAVORABLE

PROBABILIDADES CONDICIONALES PROBABILIDADES CONJUNTAS

P(FAVORABLE/0) P(AFAVORABLE n O)

0.45 0.1125

0.62 0.217

0.35 0.14
P(Afavorable) 0.4695

UNFAVORABLE

PROBABILIDADES CONDICIONALES PROBABILIDADES CONJUNTAS

P(FAVORABLE/0) P(AFAVORABLE n O)

0.45 0.2475
0.62 0.2232
0.35 0.2275
P(Afavorable) 0.6982
 DEMANDA
Low demand
1 LOT ORDER Average Demand
High demand

DEMANDA
Low demand
2 LOT ORDER Average Demand
High demand

DEMANDA

Low demand
3 LOT ORDER Average Demand
High demand

DEMANDA
Low demand
1 LOT ORDER Average Demand
High demand

DEMANDA
Low demand
2 LOT ORDER Average Demand
High demand
 DEMANDA

Low demand
3 LOT ORDER Average Demand
High demand

821.3074
644.5000

LA INFLUENCIA DE LA INVESTIGACION DE MERCADOS SI FUE RELEVANTE YA QUE AUMENTA LA UTILIDAD EN

d expected Value – EVPI and EVMI

roduct

High demand Group

562 62
Get into the campus, on the left side of the course you will be abl
362 consult the number of your group in the participants section, if you
any doubts, check with your tutor.
In case of typing the group number in the wrong way, it will gene
162 the wrong random data.

0.4
P(F/H)

0.35
P(U/A)

0.65

PAGOS POR
ESTADOS DE LA NATURALEZA PAGOS
PROBABILIDAD

UTILIDAD DE
MULTIPLICACION
PROBABILIDAD / OCURRENCIA ACUERDO A LA VE POR NODO
C/CATEGORIA
DEMANDA

0.25 662 165.5

622
0.35 662 231.7

0.4 562 224.8

0.25 862 215.5

644.5
 644.5
0.35 812 284.2
0.4 362 144.8

0.25 1062 265.5

632
0.35 862 301.7
0.4 162 64.8

PROBABILIDADES POSTERIORES P
(O/AFAVORABLE)

0.23961661341853

0.462193823216187

0.298189563365282

PROBABILIDADES POSTERIORES P
(O/AFAVORABLE)

0.354482956173016
0.319679175021484
0.3258378688055
 ESTADOS DE LA
PROBABILIDADES POSTERIORES VE NODO 4 VE NODO 2
NATURALEZA
0.23961661341853 662
0.462193823216187 662 632.181043663472
0.298189563365282 562

ESTADOS DE LA
PROBABILIDADES POSTERIORES
NATURALEZA
0.23961661341853 862
0.462193823216187 812 689.795527156549 701.190628328009
0.298189563365282 362

ESTADOS DE LA
PROBABILIDADES POSTERIORES
NATURALEZA
0.23961661341853 1062
0.462193823216187 862 701.190628328009
0.298189563365282 162

ESTADOS DE LA
PROBABILIDADES POSTERIORES VE NODO 4 VE NODO 2
NATURALEZA
0.354482956173016 662
0.319679175021484 662 629.41621311945
0.3258378688055 562

ESTADOS DE LA
PROBABILIDADES POSTERIORES
NATURALEZA
0.354482956173016 862
0.319679175021484 812 683.097106846176 704.810083070754
0.3258378688055 362
 704.810083070754

ESTADOS DE LA
PROBABILIDADES POSTERIORES
NATURALEZA
0.354482956173016 1062
0.319679175021484 862 704.810083070754
0.3258378688055 162

SI FUE RELEVANTE YA QUE AUMENTA LA UTILIDAD EN 176

 Grandmall store is fac
seasonal product for w
or low. The Pricesma
de of the course you will be able to
the participants section, if you have
k with your tutor.
r in the wrong way, it will generate
product before the sea
andom data.
order afterwards. The
millions of dollars.

VALOR ESPERADO VALOR ESPERADO VALOR ESPERADO DE

SIN INFORMACION CON INFORMACION LA INFORMACION
PERFECTA PERFECTA PERFECTA

VEsIP VEcIP VEIP

644.5 792 147.5

644.5 792 147.5
VE NODO 1

821.3074
mall store is faced with a decision to purchase a
l product for which demand may be high, medium
The Pricesmall buyer can order 1, 2 or 3 lots of the
before the season starts but cannot place another
terwards. The table 2 shows projected profits, in
s of dollars.
hase a
, medium
lots of the
another
ofits, in
 Table 5. Utility theory

Economic condition
Decision
alternative
Increase Stable

Investment 1 100 25

Investment 2 75 50

Investment 3 50 50

Probabilities
0.4 0.3
∑=1

Probabilities of indifference

decision decision
Utility
maker X maker Y
75000 0.8 0.6
50000 0.6 0.3
25000 0.3 0.15

1. Using the expected value method, which

preferable?
R//: EL MAYOR VALOR ESPERADO ES EL DE L
2

VE (Inversión 1): 47.5

VE (Inversión 2): 52.5
VE (Inversión 3): 50
 indifference. Find the preferred decision for e

expected utility approach.

VALOR
MONETARIO Decision maker X U(m)

100000 NO APLICA 1
75000 0.8 1.8
50000 0.6 1.6
25000 0.3 1.3
0 NO APLICA 0

Decision maker X Increase Stable Decrease

Investment 1 1 1.3 0
Investment 2 1.8 1.6 1.3
Investment 3 1.6 1.6 1.6
Probabilities ∑ = 1 0.4 0.3 0.3

Ue (Investment 1): 0.79

Ue (Investment 2): 1.59
Ue (Investment 3): 1.6

R//: LA DECISIÓN PREFERIDA PARA EL TOMADOR DE DECISIONES X UTILIZANDO

EL ENFOQUE DE UTILIDAD ESPERADO ES LA INVERSIÓN 3 CON VALOR DE 1,6
heory

c condition

Decrease

25

50

0.3

ng the expected value method, which decision is

preferable?
MAYOR VALOR ESPERADO ES EL DE LA INVERSIÓN
2
ence. Find the preferred decision for each decision
maker using the
expected utility approach.

VALOR
MONETARIO Decision maker Y U(m)

100000 NO APLICA 1
75000 0.6 1.6
50000 0.3 1.3
25000 0.15 1.15
0 NO APLICA 0

Decision maker Y Increase Stable Decrease

Investment 1 1 1.15 0
Investment 2 1.6 1.3 1.15
Investment 3 1.3 1.3 1.3
Probabilities ∑ = 1 0.4 0.3 0.3

Ue (Investment 1): 0.745

Ue (Investment 2): 1.375
Ue (Investment 3): 1.3

R//: LA DECISIÓN PREFERIDA PARA EL TOMADOR DE DECISIONES Y UTILIZANDO

EL ENFOQUE DE UTILIDAD ESPERADO ES LA INVERSIÓN 2 CON VALOR DE 1,375