hw assignment 1-3

8/9/2019 HW Assignment 1-3

http://slidepdf.com/reader/full/hw-assignment-1-3 1/23



Jesse DeGrendel, Devansh Gupta, Parinayinty. Was the outcomeutcome was lucky?

ee if " got a di$erent #ob as" would get the other.

a %exible scheduele andhave a general positive

& even if " was unsure that

ol.

ooks from a user who had

. " was lucky however&



Jajoo, Anup Chitikeneni



Problem 1.(

"n the )ice *niversity football example& what are some of the issues that you wouldare the alternative courses of action? What issues invove uncertainty& and how couluncertainty? What are the alternative courses of action? What are the values held bdecisions make tradeo$s amoung these values?

,ome of the issues that " would consider is the reaction the students and other grouchange& price change& or uality change to the program. 'here are di$erent measurelead to a di$erent outcome.

'he alternatives to droping down to division """ is an increase in ticket prices. 'he unicould also do fundraising& this way those who value the football program the most a

'he biggest issue of uncertainty is the reaction of the students and fans. 'hey couldthe program further. 'hey could also shake it o$ like it is not a big deal. 'o manage tsurvey students& fans& and alumni alike.

s mentioned before& " would go with a course of action of raising the ticket cost an

not every student. "f the demand for football games is relativly inelstic& thy could ret

,ome groups think that football is very iportant to the schools reputation and their uuniversity& while others more than likly care little to none when it comes to this& thetheir tution higher.

-inally the biggest trade o$ will be the reputation and utility& for a more protable pr

"f the school raises the ticket prices the trade o$ will be the sum of the increased salthe fans. ,o the school will get a higher producer surplus& bringing them closer to aprogram& where the fans will not get to be as happy.

"n both scenarios the fans are less happy& one more than the other. ut& only in theits reputation.



Jesse DeGrendel, Devansh Gupta, Parinay Jajoo,onsider in making this decision? Whatyou get information to resolve thatthe oposing groups? +ow might your

s might have if there is a divisionthat can be taken& but each woud

versity could also raise tutuion. "te the ones paying for it.

riot& or refuse to attend game& hurtinghis uncertainty the university could

fundraising. 'his way it a$cts fans& nd

ain almost all of their fans.

tility values of attending themay see it as something keeping

ogram if the school goes to """

es taken from the consumer surplus ofore protable /in this case lower loss0

rst one dos the school loose somee of



Anup Chitikeneni



2.1.a:

2y main ob#ective in this context would be to buy a brand new car which can be used

lternatives " have!

3epending on the budget " would like to spend and the key factors " would consi

2.1.b:

"n this context& my ob#ective nd any means of transportation that would allow me to c

lternative " have! /all of them except the rst one were not considered in the narrowe

2.1.c:

" can further broaden the decision context& and dene the new ob#ective. +ere my ob#e2y new alternatives would be!

2.1.d:

'he planning hori4on denitely changes. 5ach time we broaden the decision context th

Jesse DeGrendel, Devansh Gupta,

• " can go for a sports car /like corvette0 considering the performanc

• " can get a muscle car like /-ord 2ustang& Chevrolet Camaro or 3o

• " can simply get a full si4e car& which is fuel e7cient and from a rel

• Considering the unpredictable weather in 2ichigan and giving pre

• "f " want to complete my daily tasks comfortably and save time& w

o Considering to avoid risks in future " would by a

o )eady to take risks& " can consider buying a pre6

• " would talk to the people around me /colleagues& school mates or

• " can travel by a taxi whenever " need to travel some

• " can rely on public transport like buses& rails or sub ways for com

• Can also walk between places& if they are of shorter distances

• uy a bicycle& to travel between places which is the cheapest pos

• -ind a #ob which can provide transportation facility like cab for

• -ind a #ob which has work from home facility and only needs m

• >nline ,hopping

• ,top running errands unless they are very important or related

• rrange regular meet ups or hang outs with friends at my plac



or my daily commuting purposes.

der& " can denitely narrow the list of alternatives and can decide on one car.

omplete my daily tasks.

decision context above0

ctive would then be to nd a way to minimi4e my travelling.

ere will be more alternatives to be considered as the main ob#ective changes drasticall

arinay Jajoo, Anup Chitikeneni

e like high speed of the car but " need to consider the fact that it has a higher mainten

dge Challenger0 where " can show6o$ to all the people " know& but again this is a costlyliable make like +onda or 'oyota which also lasts long and has a lower maintenance co

erence to safety " might think to buy an W3 enabled ,*8 like -ord619: or an cura 2

uld denitely buy a car where " can drive to where ever and whenever re<uired.

brand new carowned car

people living around0 to arrange a car6pool along with them to reach my daily destinati

uting between places

ible option. "t is also a good health exercise and doesn=t contribute to the pollution

oth pick up and drop

e in the o7ce occasionally

to very important people

/#ust like hosting a house party0



.

nce cost

a$air t

;

ons



.@

3escribe a decision problem that you have faced recently /or with which you are curr3escribe the decision context and your ob#ectives. What were the specic decision tand what were the uncertainties? 3escribe the possible outcomes.

)ecently& in my car " started hearing a weired noice when " used my breaks.

'he decision context was what " should do to move forward. " could have ignored theabout my daily drive& or " could take it in to get looked at. "f " got it looked at " could twanted to take action or now.

" had a few ob#ectives in this. 2y rst one was safty. 'his was important because a cadangerous place if the breaks stop working. 2y other ob#ectives were maintain car odaily commute to work& and minim4e costs.

2y biggest uncertainty was if there was anything wrong or not. " would not be minimtook in the car and there was nothing wrong with it. ut& "f i" ignored it& " could loosetogether.

" ended up taking the car in and having to get the breaks replaced. 'his ended up beichoice as " was able to get all but A9 of it covered.



Bames

Jesse DeGrendel, Devansh Gupta, Parinay Jajoo, Anup Chitik ently struggling0.at you faced&

noise and wenthen ddecide if "

r can be anership for my

i4ing cost if "y car all

ing the right



neni



Step oneso that

61:::E1 ismaking

Step 3+4 61:::

friend asks you for a loan of A1&::: and o$ers to pay you backat the rate of AH: per month fot 1 months.

0 *sing a annual interest rate of 1:I& nd the net present value/to you0 of loaning your friend the money& repeat using aninterest rate of :I

0 -ind an interest rate that gives you a net present value of :. 'he interest rate for which BP8 J : is often called the internal

rate of return.

'he answers are highlighted in yellow



Koan mmount! A1&::: Bames

2onthly Payment! AH:

Learly Payment A1&:@:

Part A

"nterest )ate! 1:I or :I

BP8! with 1:I MM

;/n0

/1r0D1 /1r0N

61::: 1:@: J /A1O.9F0

/1.10D: /1.10D1

BP8 with :I 61::: 1:@: J /[email protected]

/1.0D: /1.0D1

Part B

"nterest )ate! ,olve for J @I

BP8! /A:.::0

5<uation 61::: 1:@: J :/1 i0D: /1i0D1

1::: J 1:@:

/1i0D1

1:::/1i0 J 1:@:

1:::1:::i J 1:@:

1:::i J @:

i J :.:@

Jesse DeGrendel, Devansh Gupta, Parin

; ;Q

/1r0R

rearrange e<uation61:::/1i0D: oradded to both sidesthe new e<uation

Step 2 We can multiply both sidesby /1i0D1 we can also frop D1& asanything to the power of 1 is itself

/F03istribute& /0from both sides

Step 5 3ivide by 1:::to get @I



Explain Part A

Explain Part B

y Jajoo, Anup Chitikeneni

"f we look at part we can see that we hadto solve for the net present value by usingthe formula listed. We can take the initialpay ou of A1::: as the initial payment&

then after a year& we make back 1:@:& thisis the sum of all monthly payments. "t iscalculated as one due to the rate being

annual. We see in this case& the higher therate& the lower the BP8& this is due to

higher oportunity cost leading to a greaterloss.

"n part we are going to use the sameformula& but we will be solving for " /the

interest rate0 instead of BP8. We are toldthe BP8 is to be :& and all payments aregiven to us. We can plug in : to BP8 andsolve for a interest rate of @I. -ollow the

steps to the left



)un for Win? >utcome

,enate Les ,enateor

Bo Kawer

+ouse Les *, )epresentative

F.@

Create an in%ence diagram for the politicianSs decision in gure F.9 using precision"nclude the table showing decision alternatives& chance event outcomes and conse<

We can see that the alternitive is running for the house. +owever& it is an essentiallygurenteed win to the candidate. ,o it does not have to be included.

"f the candidate picks to run fo senate& there is a chance they loose. "n this case& thelaywer. "t is most ideal to have the position in the senate& but there is more risk to tawhen taking this path. 'he individual may end up in the worse possible situation& ha

become a laywer.

icianSs basic risky decision



Jesse DeGr

ree.ences.

beome ae oning to

>utcome

Win ,enate 5lection?

)un for ,enate?



ndel, Devansh Gupta, Parinay Jajoo, Anup Chitikeneni



Bames

Jesse DeGrendel, Devansh Gupta, Parinay Jajoo, Anup Chitikeneni

F.1

2odify the in%uence diagram in gure F.11 /the hurricane forecast example0 sothat it contains nodes for each of the two ob#ectives /maximi4e safty andminimi4e cost0. Cost has a maximum attribute& but how can you dene safty?Create an attribte scale you can use to measure the degree of danger you mightenounter during a hurricane

s we can see in the added nodes& you can see that the decision will a$ect if wemaximi4e safty as a top pick& or if we minim4e cost.

We also have the idea of how to measure maximi4e safty. We an measure saftyin the number of in#uries that could occur. "f we wanted to be more specic& wecan look at the amount of medical cost that occur from a hurricane. We can alsolook at the power of the storm.



+urricane Path-orecast

3ecision

2aximi4e ,afty

2inimi4e Cost

Conse<uence



est 'elescope

2aximi4e <uality of a

2aximi4e image clarity

2aximi4e en#oyment of viewing sessions

2aximi4e brightness 2aximi4e image defnition

2aximi4e stability

2ax additi

2in light pollution in sky

2ax visits to dark6sky site

2ax transportability

Jesse DeGrendel, Devansh Gupta, P



Bames

tronomy

2ax <uality of tracking device

nal viewing accessories

2in cost of telescope

2in total weight

2inimi4e telescope si4e

rinay Jajoo, Anup Chitikeneni"n this <uestion the main ob#ective is tWhen further reading the book we canthrough maximi4ing the image clairity&and maximi4ing the astronomy. " put itleast important.

-or me as a amiture astronomer& " seeimportant because " think it feeds into

When looking at maximi4ing image clafort his through the maximi4ation of bit causes the telescope to capture mroimportant to the image& and ma4imi4e

'he next is the maximi4ation of viewinpollution in the sky& which can be achican be achived by maximi4ing transpo

-inally we have the maximi4ation of <s an amiture astronomer& " would nottwo. '+is can be done though max adminimi4ing the cost& to minimi4e thethe max <uality of tracking.



o get the best telescope possible.break this down as being achievedmaximi4ing the viewing sessions&in this order as most important to

the image <uality as the mostthe other two in a way.

irity we can get the means ob#ectivesightness& as mentioned in the article&e light& maximi4e stability& as it is4e de7nition.

g sessions. " put the one as min lightved by visiting dark blue sky& which

rtibility of the telescope.

ality. " saw this as the least important.be needing that as much as the otheritional viewing accessories&eight to minimi4e the si4e. -inally is

hw assignment 1-3

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