5 Cold Fusion - Variables & Measures Decision Variables:Good for the SocietyBad for the SocietyChance VariablesBill PassedBill RejectedHigh Political ValueLow Political ValueFusion WorksFusion FailsEconomically FeasibleEconomically InfeasibleConsequenceActually Helps SocietyDoes not make any difference
9 Cold Fusion - Solutions & Sensitivity I believe the fate of this bill will be determined by the relative publicity it can generate to help the politicians and the scientists. It would be very hard to determine the economic and social benefits derived from Cold Fusion. It could be very beneficial to the society but if it meant that we would have to stop using the existing sources of energy, it may cause severe economic strains. On the other hand it may help the economy but may create problems to the society by making destructive technology available at a cheaper cost. Even if the bill gets passed, it may not be feasible to use this technology to reap the desired benefits.
10 Prescribed Fire Objective Hierarchies Variables & Measures Problem StructuringConsequence TableInfluence DiagramDecision TreeMathematical ModelSolutions & SensitivityCases
23 GPC - Solutions & Sensitivity I was not able to get DPL to draw a decision tree. In any event, if we had more time and information we could have done more analysis. We could have used excel to set up a solver with constraints (upper and lower limits on probability) for products A & B to get a maximized return. We could also have set up a regression model with sales as the dependent variable with delay and price as independent variables to project profits with certain level of confidence. But, given the information we have, I would suggest we go with product B since we are a lot more certain about its out come. The decision will also be impacted by many other factors like the GPC’s financial strength and its position in the market etc.
30 Strenlar - Mathematical Model The following diagram, done in Excel, accompanies the mathematical model used by Fred:EMV Lawsuit = (0.6 * ((0.8 * 8,000) + (0.2 * (-200)))) + (0.4 * (-220))EMVPI job = (0.8 * 2,443) + (0.2 * 343)EMV lump sum = (0.8 * 1,252) + (0.2 * 500)EMV Optimal decision = max ( EMV Lawsuit, EMVPI job, EMV lump sum )
31 Strenlar Solutions & Sensitivity Fred’s position is unenviable. His decision will be influenced by how he feels about himself. I don’t think we can help him make a decision based on the financial outcomes. If Fred was a corporation, we could argue that he should reject the offer and take them to court since maximizing the value of the assets would be his only goal.