1. Even though independent gasoline stations have been having a difficult time, Susan Helms has been thinking about starting her own independent gasoline station. Susan’s problem is to decide how large her station should be. The annual returns will depend on both size of her station and a number of marketing factors related to the oil industry and demand for gasoline. After a careful analysis, susan developed the following table

Size of first station

Good market ($)

Fair market ($)

Poor market ($)













Very large




a)    Develop a decision table for this decision, like the one illustrated in Table A.2 eralier soal decision modelling no 1 a
b)    What is the maximax decision?
c)    What is the maximin decision?
d)    What is the equally likely decision?
e)    Develop a decision tree. Assume each outcome is equally likely then find the EMV? soal decision modelling no 1 b,c,d,e
(Jay Heize, Barry Render., Operations Management., Pearson., Tenth Edition., problems A.2., page 714)
Leah Johnson, director of legal service of Brookline wants to increase capacity to provide free legal advice but must decide  whether to do so by hiring another full time lawyer or by using part time lawyers. The table below shows the expected costs of two options for three possible demand levels
a) Using expected value, what should Ms Jhonson do? soal decision modelling 2 a
b) Draw an appropriate decision tree showing payoff and probabilities soal decision modelling 2 b
(Jay Heize, Barry Render., Operations Management., Pearson., Tenth Edition., problems A.8., page 715)


State of nature

Low Demand Medium Demand High Demand
Hire Full Time

$ 300

$ 500

$ 700

Hire Part Time

$ 0

$ 350

$ 1,000





3. Karen Villogomez, president of Wright Industries is considering whether to build a manufacturing plant in the Ozarks. Her decision is summarized in the following table
a) Construct a decision tree soal decision modelling no 3 a
b)Determine the best strategy using expected monetary value (EMV) soal decision modelling 3 b
c)What is the expected value of perfect information (EVPI) soal dan jawab decision modelling 3 c
(Jay Heize, Barry Render., Operations Management., Pearson., Tenth Edition., problems A14., page 716)

4. Dick Holliday is not sure what he should do. He can buid either a large video rental section or a small one inn his drug store. He can also gather additional information or simply do nothing. If he gather additional information, the result could suggest either a favorable or an unfavorable market, but it cost him $ 3,000 to gather information. Holliday believes that there is a 50-50 chance that the information will be favorable. If the rental market is favorable, Holliday will earn $ 15,000 with a large section or $ 5,000 with a small. With an unfavorable video rental market, however, Holliday could lose $ 20,000 with a large section or $ 10,000 with a small section. Without gathering additional information. Holliday estimate that probability of favorable rental market is 0.7. A favorable report from the study would increase that probability rental market to 0.9. Furthermore, an favorable report from the additional information would decrease the probability of a favorable rental market to 0.4. Of cource Holliday could ignore these number and do nothing. What is your advise to Holliday soal decision modelling no 4