1. The director of career advising at Orange Community College wants to use deci
ID: 328531 • Letter: 1
Question
1. The director of career advising at Orange Community College wants to use decision analysis to provide information to help students decide which 2-year degree program they should pursue. The director has set up the following payoff table for six of the most popular and successful degree programs at OCC that shows the estimated 5-year gross income (SIk) from each degree for four future economic conditions: Economic Conditions Robust Degree Program A. Graphic design B. Nursing C. Real estate D. Medical tech. E. Culinary tech. F. Computer info. tech. Recession 145 150 115 130 115 125 Average 175 180 165 180 145 150 Good 220 205 220 210 235 190 260 320 280 305 250 Determine the best degree program in terms of projected income, using the following decision criteria: (a) Maximax (b) Maximin (c) Equal likelihood (d) Hurwicz with a- 0.6 (e) Expected value with probabilities of 0.2, 0.4,0.3, and 0.1 for the four conditionsExplanation / Answer
Degree Program
Recession
Average
Good
Robust
Graphic design
145,000
175,000
220,000
260,000
Nursing
150,000
180,000
205,000
215,000
Real estate
115,000
165,000
220,000
320,000
Medical technology
130,000
180,000
210,000
280,000
Culinary technology
115,000
145,000
235,000
305,000
Computer information
technology
125,000
150,000
190,000
250,000
For Maximax:- Select the miximum of each option:-
Degree Program
Recession
Average
Good
Robust
Maximum
Graphic design
145,000
175,000
220,000
260,000
260000
Nursing
150,000
180,000
205,000
215,000
215000
Real estate
115,000
165,000
220,000
320,000
320000
Medical technology
130,000
180,000
210,000
280,000
280000
Culinary technology
115,000
145,000
235,000
305,000
305000
Computer information
technology
125,000
150,000
190,000
250,000
250000
As Maximum payoff is related to real estate, it should be selected
For Maximin:- Select the minimum of each option:-
Economic Conditions
Degree Program
Recession
Average
Good
Robust
Minimum
Graphic design
145,000
175,000
220,000
260,000
145000
Nursing
150,000
180,000
205,000
215,000
150000
Real estate
115,000
165,000
220,000
320,000
115000
Medical technology
130,000
180,000
210,000
280,000
130000
Culinary technology
115,000
145,000
235,000
305,000
115000
Computer information
technology
125,000
150,000
190,000
250,000
125000
As maximum of minimum value if related to Nursing thus Nursing should be selected.
For Equal Likelihood:- Multiply each value with 0.25 and select the maximum value:-
Degree Program
EMV
Graphic design
200000
Nursing
187500
Real estate
205000
Medical technology
200000
Culinary technology
200000
Computer information
technology
178750
As Maximum payoff is related to real estate, it should be selected.
Hurwicz :-
As ?=0.6 thus 1-? = 1-0.6 = 0.4
Economic Conditions
Degree Program
Recession
Average
Good
Robust
Graphic design
145,000
175,000
220,000
260,000
Nursing
150,000
180,000
205,000
215,000
Real estate
115,000
165,000
220,000
320,000
Medical technology
130,000
180,000
210,000
280,000
Culinary technology
115,000
145,000
235,000
305,000
Computer information
technology
125,000
150,000
190,000
250,000
Weighted avg:-
Graphic design
=(260000*0.6 + 145000*0.4)
=214000
Nursing
=(215000*0.6 + 150000*0.4)
=189000
Real estate
=(320000*0.6 + 115000*0.4)
=238000
Medical technology
=(280000*0.6 + 130000*0.4)
=220000
Culinary technology
=(305000*0.6 + 115000*0.4)
=229000
Computer information
technology
=(250000*0.6 + 125000*0.4)
=200000
As greatest pay off is related to Real Estate thus it should be selected.
Degree Program
Recession
Average
Good
Robust
Graphic design
145,000
175,000
220,000
260,000
Nursing
150,000
180,000
205,000
215,000
Real estate
115,000
165,000
220,000
320,000
Medical technology
130,000
180,000
210,000
280,000
Culinary technology
115,000
145,000
235,000
305,000
Computer information
technology
125,000
150,000
190,000
250,000
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