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Assignment-3 1

The document provides an analysis of alternative options given probabilities of different weather states and associated costs. It calculates the expected cost of each alternative and determines that alternatives c and d are best since they have the lowest average cost. It also considers making decisions based on best and worst possible outcomes and when those may provide the same decision. Further, it analyzes sales data from a laptop retailer to determine frequency distributions, average daily sales, and estimated yearly profit. Finally, it considers a dice game and recommends not playing due to low probability of winning and expected loss.

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218 views3 pages

Assignment-3 1

The document provides an analysis of alternative options given probabilities of different weather states and associated costs. It calculates the expected cost of each alternative and determines that alternatives c and d are best since they have the lowest average cost. It also considers making decisions based on best and worst possible outcomes and when those may provide the same decision. Further, it analyzes sales data from a laptop retailer to determine frequency distributions, average daily sales, and estimated yearly profit. Finally, it considers a dice game and recommends not playing due to low probability of winning and expected loss.

Uploaded by

WeStan Legends
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

1. Find the best alternative given the cost outcomes below.

The probability of rain is


0.3, clouds is 0.2, and sun is 0.5.
Alternative State
s
Rainy Cloudy Sunny
a 6 3 4
b 2 4 5
c 5 4 3
d 5 4 3

a. Expected (cost) = P (Rainy) + P (Cloudy) + P(Sunny)


= 0.3 (6) + 0.2 (3) + 0.5 (4)
= 1.8 + 0.6+ 2
= 4.4

b. Expected (cost) = P (Rainy) + P (Cloudy) + P(Sunny)


= 0.3 (2) + 0.2 (4) + 0.5 (5)
= 0.6 + 0.8 + 2.5
= 3.9

c. Expected (cost) = P (Rainy) + P (Cloudy) + P(Sunny)


= 0.3 (5) + 0.2 (4) + 0.5 (3)
= 1.5 + 0.8 + 1.5
= 3.8

d. Expected (cost) = P (Rainy) + P (Cloudy) + P(Sunny)


= 0.3 (5) + 0.2 (4) + 0.5 (3)
= 1.5 + 0.8 + 1.5
= 3.8

 Based on the computations above, c and d are the best alternatives because
they both have a lower average cost.

2. In Number 1, base your decision instead on the worst possible outcome for each
alternative. Now consider a decision based on the best possible outcome. When
might both of these give you the same decision?
 When it comes to cost, the higher the cost, the worse the outcome. In that case,
the best possible outcome will be based on lower-cost alternatives, a (3); b (2); c
(3); d (3). As a result, the best solution with the lowest cost is b. However, before
making that decision, we should prioritize the best (lowest) cost over the worst
(highest) cost by applying both rules.

3. Laptops‐R‐Me keeps detailed data on their laptop sales. In the last 300 days the
number of laptops sold was as shown in the table below.

Number Sold Number of Days


None 15
1 30
2 87
3 141
4 27

a. Find the frequency distribution of sales (in percentage).

Number Sold Number of Days Frequency


(f) Distribution (f/300)
None 15 5%
1 30 10%
2 87 29%
3 141 47%
4 27 9%
Total 300

b. Find the average number of laptops sold daily.

Sold laptops = 0 (df) + 1 (df) + 2 (df) + 3 (df) + 4 (df)


= 0 (0.05) + 1 (0.1) + 2 (0.29) + 3 (0.47) + 4 (0.09)
= 0 + 0.1 + 0.58 + 1.41 + 0.36
= 2.45 laptops

c. Find the yearly profit assuming the store is only open on weekdays 50 weeks
a year and the average profit per laptop is $65.
2.45 laptops sold per day
x 50 weeks
122.50
x 5 days per week
612.50
x $65 profit per laptop
Yearly profit $39,812.50

4. You are offered the chance to play a dice game at $10 per toss of 2 dice. If the
sum of the two dice tossed is 4, you will receive $100. Should you play or not?
Why?

 Tossing two dice has a probability of 3/36 or 8.33% of producing a sum of four,
which is (1,3); (3,1); (2,2). I will not play the game because my chances of
achieving the sum of four are lower and it costs me money to do so. I anticipate
receiving $8.33 ($100 x 8.33%) less the cost of $10, for a total cost of $1.67.

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