Each student should pick and analyze a decisions problem of his own. The decision problems should have the following characteristics:
- Independent alternatives, each of its own characteristics and possible payoffs. The alternatives should be independent and mutually exclusive (i.e., only one alternative is to be selected).
- States of nature (at least two) for which the outcome of each alternative may differ.
- Probabilities of the states of nature; you may use historical data, technical reports, literature, surveys, to estimate the probabilities.
- Realistic decision problems of your workplace are more preferred.
- You should solve the decision problem using:
a. Optimistic
b. Pessimistic
c. Minimum regret
d. Risk neutral - The perfect and sample information should be explained. You may assume fictional data for sample information for the sake of demonstration if accurate data is not available.
- You should also conduct an AHP analysis as follows:
a. For the suggested alternatives above, try to identify at least 3 criteria that may result in different evaluation of the alternatives.
b. Conduct an AHP analysis to evaluate the alternatives. Use your own personal evaluation to complete the analysis.
c. Show the necessary calculations for the final ranking of the alternatives.
d. Calculate the CI for one evaluation matrix.
e. Use Expert Choice software to verify your answers.
f. Conduct a sensitivity analysis using Expert choice. - You should present your work in a report that consists of almost 4000 words, not including the tables and figures.