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MBA IT, Mater in Science and Technology
Devry
Jul-1996 - Jul-2000
Professor
Devry University
Mar-2010 - Oct-2016
Draw an influence diagram of the following decision problem. You have been called upon to pick up the XYZ project where the previous decision analyst has left it. As the analyst is hurrying off, she hands you her notes and says “This is all I have on the XYZ project; you will have to draw the influence diagram yourself.” Here are the notes she hands you:
If color is red, then profit = revenues – fee.
If color is blue, then profit = revenues.
The only color alternatives are red and blue. revenues = domestic + foreign
Fee is either $25K or $50K (equally likely) and will be known before choosing color.
Foreign revenues are equally likely to occur between $0 and $200K, inclusive.
If color is blue, then domestic revenues are p($400K) = 0.3 and p($50K) = 0.7.
If color is red, then domestic revenues are uncertain, and normally distributed with a mean of $200K and a standard deviation of $25K.