Decision Support Systems - Doc

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Running head: DECISION SUPPORT SYSTEMSDecision Support SystemsName of the StudentName of the UniversityAuthor Note
DECISION SUPPORT SYSTEMS1Table of ContentsAnswer 1....................................................................................................................................2Answer 2....................................................................................................................................4Answer 3....................................................................................................................................6Answer 4....................................................................................................................................6Part 1......................................................................................................................................6Part 2......................................................................................................................................7Answer 5....................................................................................................................................9Answer 6..................................................................................................................................10Task 1...................................................................................................................................10Task 2...................................................................................................................................12Conclusion............................................................................................................................14
DECISION SUPPORT SYSTEMS2Answer 1There lies different opportunities for acquiring profit as well as loss in the concernedbusiness by Ilya and Gregor, which in turn depend on the set of three probable strategieswhich yield different results in the favourable market and in the unfavourable market.Strategy 1 involves Gregor and Ilya renting a considerably costly office in the location neartheir probable customers. On the other hand, under Strategy 2, they can rent a comparativelycheaper office in the neighbouring suburb region and the last strategy is the strategy of not atall opening any business venture.The outcomes of these strategies can be seen from the following table:Table 1.1 Estimated Pay-Off (Positive or Negative) of the three strategies in differentmarketsa. Strategy options for IlyaTable 1.2: Ilya’s StrategyAs can be seen from the above, Ilya being a risk loving and optimist personnel iseager to opt for maximum risk to get greater benefits. Keeping this into account the optimumstrategy in the perception of Ilya is that of Strategy 1, as here, both the risks as well as levelof expected profits are maximum.
DECISION SUPPORT SYSTEMS3b. Strategy option for GregorTable 1.3 Gregor’s StrategyGregor being more conservative and risk averse than that of Ilya, the optimumstrategy of the same is the one with maximum profit along with minimum risk. Thus, Gregorwill choose the third strategy as the loss is minimum in the concerned strategy.c.As can be seen from the concern problem, the probability of the market to be favourablefor the business is 0.55 while the probability of the same to be non-favourable is 0.45. Thus,the expected pay-offs of each of the concerned strategies, in this situation, can be comparedwith the help of the following table:Table 1.4: Expected pay-offs of the different strategiesAs is evident from the above numbers, the expected profit is comparatively highest incase of the second strategy, which in turn indicates to the fact that the second strategy ofgetting an office in the cheaper suburbs will be chosen.d.If the probability of the presence of a favourable market is not fixed at 0.55 and insteadvaries between range of 0 to 1, then according to the different values of the probability of the
DECISION SUPPORT SYSTEMS4same the expected pay-offs or returns from the concerned market can be seen from thefollowing figure:Figure 1: Expected pay-offs of different strategies when probability varies between 0and 1e.i. The probability range in which the first strategy can be chosen is 0.67P1ii. The probability range in which the second strategy can be chosen is 0.29P0.66iii. The probability range in which the third strategy can be chosen is 0P0.28Answer 2From the concerned problem, the linear programming model can be constructed as below:Min (Z) = 960(TV) + 480 (Radio) + 600(Billboards) + 120 (Newspaper)Subject to:TV10Radio10
DECISION SUPPORT SYSTEMS5Billboards10Newspaper10TV6Radio6TV + Radio6960(TV) – 600(Billboards) – 120(Newspaper)0960(TV) + 480(Radios) + 600(Billboards) + 120(Newspapers)14000Non-negativity constraints: TV0, Radios0, Newspaper0, Billboards0The solution of the above problem can be seen as follows:a.Thus, the maximum number of person Jim can reach within his weekly budget of 14,000is:= (6*36000) + (6*26500) +(8*30000) = 615000.
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