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Nady [450]
2 years ago
7

What is the difference between an optimistic approach and a pessimistic approach to decision making under assumed uncertainty

Business
1 answer:
Hitman42 [59]2 years ago
3 0

Answer:

The optimistic approach examines the best possible outcome in a given situation and chooses the 'best of the best' while the pessimistic approach examines the worst possible outcome in a given situation and chooses the 'best of the worst'.

Explanation:

Decision making under assumed uncertainty is an approach that is taken when the outcomes of future events are not entirely known. The Hurwicz criterion provides a basis on which the pessimistic and optimistic outcomes can be balanced. This criterion allows the person who makes the decision to chose a coefficient of pessimism signified by alpha (α) and it is a decimal that is graded between 0 and 1. This number signifies the worst possible outcome whereas, the number (1-α) signifies the best outcome.

So, the optimistic approach examines the best possible outcome in a given situation and allows the decision-maker to choose the 'best of the best', while the pessimistic approach examines the worst possible outcome in a given situation and the decision-maker to choose the 'best of the worst'

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Inspection time for a plant is 10,000 hours per year. The cost of inspection consists of salaries of four inspectors, totaling $
VLD [36.1K]

Answer:

$90,000

Explanation:

Inspection hours (h) = 10,000 hours per year

Total salaries (S) = $60,000

Cost of supplies (c) = $3 per inspection hour

Since there is no need for any inspection activity, all of the inspection costs qualify as nonvalue-added cost.

I = S+(h*c)\\I=\$60,000 +(10,000*\$3)\\I=\$90,000

The nonvalue-added cost of inspection per year is $90,000

3 0
2 years ago
Mr. and Mrs. Atoll are planning a party for 10 people and want to make sure they have enough soda for everyone to have two bottl
Rama09 [41]

Answer:

3. one case of 24 sodas @ $ 18.50

Explanation:

The question requires that the hosts need to have enough to have two sodas each. The number of guests being 10, the requirement is to have 20 sodas.

Now comparing the various pack sizes available:

1. 20 sodas $ 1.50 per bottle, Total cost $ 30, per serving cost $1.50

2. 4 6 packs @ $ 5 each. Total cost $20, Per serving cost $0.83

3. 24 soda case @ $18.5. Total cost $ 18.50, Per Serving costs $ 0.77

4, 2 x 24 soda cases @ 18.50. Total Cost $ 37.00 Per serving costs $ 0.77

The per serving costs are the same in 3 & 4 above, however, since the requirement is to have 20 sodas and the overall costs as well as the per serving costs is the best in option 3, this is the preferred option.

8 0
2 years ago
​Lori, who is risk​ averse, has two pieces of​ jewelry, each worth​ $1,000. She plans to send them to her​ sister's firm in Thai
Mkey [24]

Answer:

The correct answer is the option E: higher if she sends the jewelry to Thailand in separate boxes because she's risk averse.

Explanation:

On the one hand, if Lori is <em>risk averse</em> then that means that she tends to prefer the less risk that can be in the moment of making a decision without given importance to what she can make of that decision.

On the other hand, the <em>expected utility</em> hypothesis states that Lori will choose the option that will have a greater utility according to the situations.

In conclussion, Lori will choose to send the jewelry to Thailand in separate boxes because she is risk averse and she will prefer to expend more money and lower the risks and by doing that she will have a higher expected utility.

3 0
2 years ago
Roger is an executive of a multinational tractor manufacturing company. while representing the company at conferences and meetin
cricket20 [7]

This communication style is called <u>"leadership storytelling".</u>

Storytelling is a key leadership technique since it's fast, intense, free, normal, reviving, stimulating, community, convincing, all encompassing, engaging, moving, significant and true. Stories enable us to understand associations.  

Storytelling is in excess of a fundamental arrangement of apparatuses to complete things: it's a route for pioneers – wherever they may sit – to exemplify the change they look for.

3 0
2 years ago
Reynolds Construction's value of operations is $750 million based on the free cash flow valuation model. Its balance sheet shows
zhuklara [117]

Answer:

option (d) $500

Explanation:

Data provided in the question:

Reynolds Construction's value of operations = $750 million

short-term investments = $50 million

accounts payable = $100 million

notes payable = $100 million

long-term debt = $200 million

common stock = $40 million

retained earnings = $160 million

Now,

Firm value of equity

= Free cash flow value + Investments - Debt - Notes payable

= $750 million + $50 million - $200 million - $100 million

= $500 million

Hence,

the correct answer is option (d) $500

6 0
2 years ago
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