Spreadsheet Modeling & Decision Analysis: A Practical Introduction to Business Analytics (MindTap Course List)
8th Edition
ISBN: 9781305947412
Author: Cliff Ragsdale
Publisher: Cengage Learning
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Chapter 1, Problem 27QP
Summary Introduction
To provide: An example of decision by a leader in which the good decision resulted in bad and vice versa.
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Hale's Productions is considering producing a pilot for a comedy series in the hope of selling it to a major streaming service. The
streaming service may decide to reject the series, but it may also decide to purchase the rights to the series for either one or two
years. At this point in time, Hale may either produce the pilot and wait for the streaming service's decision or transfer the rights
for the pilot and series to a competitor for $100,000. Hale's decision alternatives and profits (in thousands of dollars) are as
follows:
Decision Alternative
Produce pilot, d₁
Sell to competitor, d₂ 100
P(F) = 0.69
P(U)= 0.31
P(S₁IF) = 0.08
P(S₂IF) = 0.28
P(S3|F) = 0.64
i
Decision Tree
Agency
1
Reject, S₁
The probabilities for the states of nature are P(S₁) = 0.1947, P(S₂) = 0.3141, and P(S3) = 0.4912. For a consulting fee of $5,000,
an agency will review the plans for the comedy series and indicate the overall chances of a favorable streaming service reaction to
the series. Assume that the…
Hale's Productions is considering producing a pilot for a comedy series in the hope of selling it to a major streaming service.
The streaming service may decide to reject the series, but it may also decide to purchase the rights to the series for either one
or two years. At this point in time, Hale may either produce the pilot and wait for the streaming service's decision or transfer
the rights for the pilot and series to a competitor for $100,000. Hale's decision alternatives and profits (in thousands of
dollars) are as follows:
Decision Alternative
P(F) = 0.69
P(U) = 0.31
P(S₁IF) = = 0.07
P(S₂IF) = 0.29
P(S3IF) = 0.64
Produce pilot, d₁
Sell to competitor, d₂
The probabilities for the states of nature are P(S₁) = 0.1878, P(S₂) 0.3210, and P(S3) = 0.4912. For a consulting fee of
$5,000, an agency will review the plans for the comedy series and indicate the overall chances of a favorable streaming
service reaction to the series. Assume that the agency review will result in a favorable…
Hale's TV Productions is considering producing a pilot for a comedy series in the hope of selling it to a major television network. The network may decide to reject the series, but it may also decide to purchase the rights to the series for either one or two years. At this point in time, Hale may either produce the pilot and wait for the network's decision or transfer the rights for the pilot and series to a competitor for $150,000. Hale's decision alternatives and profits (in thousands of dollars) are as follows:
State of Nature
Decision Alternative
Reject, S1
1 Year, S2
2 Years, S3
Produce pilot, d1
-100
50
250
Sell to competitor, d2
150
150
150
The probabilities for the states of nature are P(S1) = 0.20, P(S2) = 0.30, and P(S3) = 0.50. For a consulting fee of $55,000, an agency will review the plans for the comedy series and indicate the overall chances of a favorable network reaction to the series. Assume that the agency review will result in a favorable (F) or an…
Chapter 1 Solutions
Spreadsheet Modeling & Decision Analysis: A Practical Introduction to Business Analytics (MindTap Course List)
Ch. 1 - Prob. 1QPCh. 1 - Prob. 2QPCh. 1 - Prob. 3QPCh. 1 - Prob. 4QPCh. 1 - What is the relationship between business...Ch. 1 - What kinds of spreadsheet applications would not...Ch. 1 - Prob. 7QPCh. 1 - Prob. 8QPCh. 1 - What is a dependent variable?Ch. 1 - What is an independent variable?
Ch. 1 - Can a model have more than one dependent variable?Ch. 1 - Can a decision problem have more than one...Ch. 1 - Prob. 13QPCh. 1 - Prob. 14QPCh. 1 - In what ways are descriptive models different from...Ch. 1 - Prob. 16QPCh. 1 - Prob. 17QPCh. 1 - Consider the spreadsheet model shown in Figure...Ch. 1 - Prob. 19QPCh. 1 - Prob. 20QPCh. 1 - Prob. 21QPCh. 1 - Prob. 22QPCh. 1 - Prob. 23QPCh. 1 - Prob. 24QPCh. 1 - Prob. 25QPCh. 1 - Prob. 26QPCh. 1 - Prob. 27QP
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