1 tayangan

Diunggah oleh Fara Pratiwi

© All Rights Reserved

- DecTree Supplement
- Quantitative Techniques Comprehensive Mock Examinations
- Artificial Intelligence - CS607 Handouts Lecture 9 - 10
- 06_Decision Making Under Risk
- Decision Tree Analysis
- DAM Example Problems
- Desision Making Tools
- Important prodman
- income activities
- Assignment
- Operations Research
- Aptitude
- burford-principal visits reflection 1
- Unit Plan
- Garcia_CMSC142
- MB0048_1208000294
- 10.1007@978-3-540-69830-22
- Summay Chapter 6 and 8(Paul Goodwin and George Wright).docx
- Probability ClassExamples
- rubric template

Anda di halaman 1dari 48

Manahan Siallagan

Problems of Choice

C1 O1

D

C2 O2

D : a decision maker

C : possible courses of action

(alternatives)

O1 : desirable outcome;

2 O2 : undesirable outcome

Complex Rational Choice

needed to predict the I can’t see

consequences of each option

Incomplete information

The other side may influences the

consequences (Strategic/Interactive

Decision).

probability of the consequences

3

Decision Analysis Problems

Decision analysis is designed to address

decision making in the face of great

uncertainty

Introducing new product into

marketplace:

What will the reaction of potential

customers ? Competitors?

Investing in securities :

How is the economy?

How about interest rates?

Selecting the mix of crops and livestock

for the upcoming season :

What will be the weather conditions?

Drilling for oil in particular location :

How likely is there to be oil in that

location?

How much?

Tools: Decision tree

Why Decision Tree?

It can help a decision maker to develop a clear view of the

structure of a problem anda make it easier to determine the

possible scenarios that can result if a particular course of

action is chosen.

Decision trees can also help a decision maker to judge the

nature of the information that needs to be gathered in order

to tacke a problem.

It can be an excellent medium for communicating one

person’s perception of a problem to other individuals.

5

Model of Decision Tree

p1,1

E1,1 O1

C1 p1,2

E1,2 O2

D p2,1 O1

E2,1

C2

E2,2 p2,2 O2

D : a decision maker

C : possible courses of action (alternatives)

O1 and O2 : possible outcomes/consequences/payoffs

Ei,j : Events (State of Natures/SON)

pi,j : probabilities

6

Structure of Decision Tree

Decision Node

Alternatives available for decision maker to choose;

Situation controllable by decision maker.

Alternatives of actions

7

Structure of Decision Tree

Event Node

Events may happen after every action made by decision maker;

Uncontrollable by decision maker;

Decision maker only has information about probability of each

event no complete information.

p1

E1

E2 p2

An action

E3

p3

8 Events

Building Decision Tree

What are the first decision, and next decisions to be made?

2. Identify what SON happen after each decision;

3. Draw decision node and event node (SON);

4. Complete information about probabilities;

5. Complete information about payoff.

9

Goferbroke Company Case

Goferbroke Company(1)

Max Flyer is the founder of and sole owner of the Goferbroke Company, which

develops oil wells in unproven territory. Max’s friends refer to him affectionately as

a wildcatter. However he prefers to think himself as an entrepreneur. He has poured

his life saving’s into the company in the hope of making it big with a large strike of oil.

Now his chance possibly has come. His company has purchased various tracts of land

that larger oil companies have spurned as unpromising even though they are near

some large oil fields. Now Max has received an exciting report about one of these tracts. A

consulting geologist has just informed Max that he believes there is one chance in four of oil

there.

Max has learned from bitter experience to be skeptical about the chances of oil

reported by consulting geologist. Drilling for oil on this tract would require an

investment of about $100,000. If the lands turns out to be dry (no oil), the entire

investment would be lost. Since his company doesn’t have much capital left,

this lost would be quite serious.

Goferbroke Company(2)

On the other hand, if the tract does contain oil, the consulting geologist estimates

that there would be enough there to generate a net revenue of approximately

$800,000, leaving an approximate profit of:

Profit if find oil = Revenue if find oil – Drilling cost

= $800,000 - $100,000

= $700,000

There is another option that another oil company has gotten wind of consulting

geologist’s report and so has offered to purchase the tract of land from Max for

$90,000. This is very tempting. This too would provide a welcome infusion of

capital into the company, but without incurring the large risk of a very

substansial loss of $100,000.

The Goferbroke Company

Problem

Should Max sell his land or doing drilling?

Alternative:

1. Sell land

2. Drilling

Possibility event that could happen (state of nature):

- Found Oil

- No Oil (dry)

Payoff Table (Information from the case)

Payoffs

State of Nature (thousands)

Alternative Oil Dry

Drill for oil $700 -$100

Sell the land $90 $90

Prior Probability 0.25 0.75

choose?

The Maximax Decision Criterion

Focus only on the best that can happen “ the

maximax criterion always chooses the decision

alternative that can give the largest possible

payoff “Total Optimist

Identify the maximum payoff from any SoN for

each decision alternative

Find the maximum of these maximum payoffs

and choose the corresponding decision alternative

Weakness : abandoning prior probability and

abandoning other payoff beside only the biggest.

Alternative Oil Dry

Drill for oil $700 -$100 700 Maximax

Sell the land $90 $90 90

The Maximin Decision Criterion

Focus only on the worst that can happen to us

(total pessimist)

Identify the minimum payoff from any SoN for each

decision alternatives

Find the maximum of these minimum payoffs and

choose the corresponding decision alternative

Weakness : abandoning prior probability and

abandoning other payoff beside only the maximin.

Alternative Oil Dry

Drill for oil $700 -$100 -$100

Sell the land $90 $90 90 Maximin

The Maximum Likelyhood Criterion

Focus on the most likely state of nature.

Identify the state of nature with the largest

prior probability;

Choose the decision alternative that has

the largest payoff for this state of nature.

Weakness: abandoning payoff, that

actually payoff maybe very big.

Alternative Oil Dry

Drill for oil $700 -$100

Sell the land $90 $90 Step 2 : Maximum

Prior Probability 0.25 0.75

Step 1 : Maximum

Bayes’ Decision Rule

Bayes’ Decision Rule choose best alternative by considering

entire information that being owned by doing steps mentioned:

Calculate Expected Value for every decision alternative

EV = (prior prob x payoff)

Choose the decision alternative that has the largest Expected

Value

Advantage :

Considering entire information (alternatives, payoffs, and prior

probabilities);

In long term, if the decision occur sequential, then this criteria

will resulting payoff that mostly probably happen.

Alternative Oil Dry EV

Drill for oil $700 -$100 100 Maximum

Sell the land $90 $90 90

Prior Probability 0,25 0,75

Decision Trees of Goferbroke

tools that could describe entire

alternatives with whole events that may

happen (SoN).

Showing : Alternatives, SoN, Prior

Probability, and Payoff.

Using Bayes’ Decision Rule to choose the

best action.

DT of Goferbroke’s Case

Decision:

Drill or Sell the Land

SON

Oil or Dry

-100

Sell

90

DT of Goferbroke’s Case

Event nodes

Oil 0.25

800

Drill

0

Sell

90

DT of Goferbroke’s Case

Payoff

Oil 0.25

700

800

Drill

-100

0

Sell

90

90

DT of Goferbroke’s Case

Payoff

Oil 0.25

700

800

Drill

-100

0

Sell

100 Expected payoff

90 = MAX [100,90]

90 90

= 100

Expected Value (EV) per event node;

Action: Drill

100=(0.25*700) + (0.75*(-100))

Decision Analysis:

New Information or Posterior

Probability

23

Process in Revising Decision tree

Prior probability

New information

Posterior probability

24

Assessing Probability

There are three approaches to assessing the probability of an

uncertain event:

1. a priori classical probability

X number of ways the event can occur

probability of occurrence

T total number of elementary outcomes

number of favorable outcomes observed

probability of occurrence

total number of outcomes observed

3. subjective probability

an individual judgment or opinion about the probability of occurrence

Computing Joint and

Marginal Probabilities

P( A and B)

total number of elementary outcomes

Where B1, B2, …, Bk are k mutually exclusive and collectively exhaustive

events

Joint Probability Example

total number of cards 52

Color

Type Red Black Total

Ace 2 2 4

Non-Ace 24 24 48

Total 26 26 52

Marginal Probability Example

P(Ace)

2 2 4

P( Ace and Re d) P( Ace and Black )

52 52 52

Color

Type Red Black Total

Ace 2 2 4

Non-Ace 24 24 48

Total 26 26 52

Computing Conditional Probabilities

A conditional probability is the probability of one event, given

that another event has occurred:

P(A | B) of A given that B has

P(B) occurred

P(B | A) of B given that A has

P(A) occurred

P(A) = marginal probability of A

P(B) = marginal probability of B

Conditional Probability Example

(AC) and 40% have a CD player (CD). 20% of the cars

have both.

has AC ?

Conditional Probability Example

(continued)

Of the cars on a used car lot, 70% have air conditioning (AC) and 40% have a CD player

(CD).

20% of the cars have both.

CD No CD Total

No AC 0.2 0.1 0.3

Total 0.4 0.6 1.0

P(CD | AC) 0.2857

P(AC) 0.7

Conditional Probability Example

(continued)

Given AC, we only consider the top row (70% of the cars). Of these, 20% have a CD

player. 20% of 70% is about 28.57%.

CD No CD Total

No AC 0.2 0.1 0.3

Total 0.4 0.6 1.0

P(CD | AC) 0.2857

P(AC) 0.7

Using Decision Trees

.2

Given AC or no AC: .7 P(AC and CD) = 0.2

.5

.7

All

Cars

.2

.3 P(AC’ and CD) = 0.2

.3

Using Decision Trees

(continued)

.2

Given CD or no CD: .4 P(CD and AC) = 0.2

.2

.4

All

Cars

.5

.6 P(CD’ and AC) = 0.5

.6

Bayes’ Theorem

Bayes’ theorem is used to revise previously calculated probabilities after new information is

obtained

P(A | B i )P(B i )

P(B i | A)

P(A | B 1 )P(B 1 ) P(A | B 2 )P(B 2 ) P(A | B k )P(B k )

where:

Bi = ith event of k mutually exclusive and collectively

exhaustive events

A = new event that might impact P(Bi)

Goferbroke’s Case Continued

Survey by geologist will provide more accurate

information about P(oil);

How if Max has to decide two alternatives:

1. Do survey before drill/sell

2. Drill/sell without Survey

Events:

Do Survey

FSS : Favorable Seismic Sounding : Oil is fairly likely

USS : Unfavorable seismic sounding: Oil is quite unlikely.

Drill or Sell

Oil

Dry

P=?

Oil

Drill

P=?

P=? Dry

Unfavorable

Sell

Do Survey

P=?

30000 Oil

Drill

P=?

P=? Dry

Favorable

1

Sell

P=?

Oil

Drill

P=?

Dry

No Survey

Sell

Max`s Experience

•P(state) prior; which is P(Oil)=0.25 & P(Dry)=0.75;

•P (finding|state) being known based on Max’s

experiences; which is

•P(FSS|Oil)=0.6,

•P(USS|Oil)=0.4,

•P(FSS|Dry)=0.2, and

•P(USS|Dry)=0.8

Which:

•State : Oil and Dry;

•Finding : FSS and USS;

•FSS : favorable seismic sounding; oil is fairly likely;

•USS : unfavorable seismic sounding; oil is quite unlikely.

P(Oil│USS)

Oil

P(FSS│Oil) = 0,6 Drill

P(USS) Dry

Unfavorable

P(FSS│Dry) = 0,2

1

P(USS│Dry) = 0,8

Sell

Do Survey

P(Oil│FSS)

Oil

Drill

P(Dry│FSS)

P(FSS) Dry

Favorable

Sell

P(Oil)

Oil

Drill

P(Dry)

Dry

No Survey

Sell

Posterior Probability Formula

P(FSS|Dry) = P(FSS&Dry) / P(Dry)

P(Oil|FSS) = P(Oil&FSS) / P(FSS)

P(Dry|FSS) = P(Dry&FSS) / P(FSS)

P(Oil|USS) = P(Oil&USS) / P(USS)

P(Dry|USS) = P(Dry&USS) / P(USS)

P(FSS&Oil) = P(Oil&FSS) Law of Probability

Contingency table

Since :

P (Oil) = 0.25; P(FSS|Oil) = 0.6

Oil 0.15 0.1 0.25 Then

P(FSS & Oil) = P(FSS|Oil) x P(Oil)

Dry 0.15 0.6 0.75 = 0.6 X 0.25

= 0.15

0.3 0.7 Do same step for find P (FSS&Dry) = 0.15

So :

P(FSS) = P(FSS&Oil)+P(FSS&Dry)

= 0.3

Posterior Probability Formula (cont’d)

P(Oil|FSS) = P(Oil&FSS) / P(FSS)

Since : P(FSS) = 0.3; from contigency table

P(Oil&FSS) = P(FSS&Oil) = 0.15

Then : P(Oil|FSS) = 0.15 / 0.3 = 0.5

Do same step for P(Oil|FSS); P(Dry|FSS); P(Oil|USS);

P(Dry|USS)

FSS USS P(Oil|FSS)= P(Oil&FSS) = 0.15 = 0.5

P(FSS) 0.3

Oil 0.15 0.1 0.25

P(FSS) 0.3

0.3 0.7

43

Leveled Decision Analysis

Decision T ree for Goferbroke Co. Problem (With Survey)

0,143

Oil

P(Oil|USS)

P(USS) Drill 800 670

670

0,7

-100 -15,714 0,857

Dry P(Dry|USS)

Unfavorable -130

2 0 -130

Expected payoff

0 60

= MAX [123,100]

Sell

60

= 123

90 60

Do Survey

0,5 P(Oil|FSS)

-30 123 Oil

670

0,3 Dry

Favorable -130

1 0 -130

0 270

1 Sell

123 60

90 60

0,25

Oil P(Oil)

700

Drill 800 700

Dry P(Dry)

No Survey -100

1 0 -100

0 100

Sell

90

90 90

Posterior Probability

Given:

P(state)=prior probability: P(oil) and P(dry)

P(finding|state) = Max’s experience on probabilities of finding (FSS or

USS) could occur if some SoN (oil or dry) has been already happened.

Oil and FSS Oil, diket FSS

0.6 et Oil

, di

k P(Oil and FSS) P(state|finding)

F SS Prob. posterior

US 0

P(oil) S, .4 P(Oil and USS)

dik

et O

25 il 0.25*0.4=0.1 0.1/0.7=0.14

P(oil|USS)

0. il P(USS|oil) Oil and USS Oil, diket USS

O

0.

Dr 75 P(FSS|dry) 0.75*0.2=0.15 0.15/0.3=0.5

P(dry|FSS)

y Dry and FSS Dry, diket FSS

0.2 et Dry P(Dry and FSS)

k

P(dry) , di

F SS

US 0.

S , di 8 P(Dry and USS)

ket

Dry 0.75*0.8=0.6 0.6/0.7=0.86

P(USS|dry) Dry and USS Dry, diket USS

P(dry|USS)

0,143

Oil

670

Drill 800 670

0,7 Dry

Unfavorable -130

2 0 -130

0 60

Sell

60

90 60

Do Survey

0,5

-30 123 Oil

670

Drill 800 670

0,3 Dry

Favorable -130

1 0 -130

0 270

1 Sell

123 60

90 60

0,25

Oil

700

Drill 800 700

Dry

No Survey -100

1 0 -100

0 100

Sell

90

90 90

Thank You

47

Exercise

Von Holt was a general marketing manager. He was assigned to assess the prospect of a

new product to be manufactured. The approximately production cost was USD 90,000.

If it had been sold out then it would gain revenue USD 500,000. In other side, if he

didn’t decide to produce then the company would loss nothing. Based on his experience,

he knew that 0.2 was the probability that the market would accept the product. Even

though, he wasn’t sure whether it represented the current data. He had another option

to run market research and collect the last information, but it took investments as

many as USD 10,000. Again, based on experience, he had known that if the customer

accepted the product then the survey would exhibit that the result was favorable with

probability 0.6. However, the probability would reduce to 0.1, if the customer rejected.

Now, help Holt to decide the best strategy! …. and … don’t forget to :

Draw the tree diagram.

Show us how did you get the probability…

- DecTree SupplementDiunggah olehss
- Quantitative Techniques Comprehensive Mock ExaminationsDiunggah olehLuke Shaw
- Artificial Intelligence - CS607 Handouts Lecture 9 - 10Diunggah olehPooja Sinha
- 06_Decision Making Under RiskDiunggah olehAyush Gogia
- Decision Tree AnalysisDiunggah olehSugumar Balu
- DAM Example ProblemsDiunggah olehgeethamadhu
- Desision Making ToolsDiunggah olehJen Lindugan
- Important prodmanDiunggah olehTata Young
- income activitiesDiunggah olehJp Kafle
- AssignmentDiunggah olehJagan Maximus
- Operations ResearchDiunggah olehsonikac22124
- AptitudeDiunggah olehRaka Poddar
- burford-principal visits reflection 1Diunggah olehapi-430812455
- Unit PlanDiunggah olehNick Koberstein
- Garcia_CMSC142Diunggah olehragcast
- MB0048_1208000294Diunggah olehrasikapatil111
- 10.1007@978-3-540-69830-22Diunggah olehdiedie_herv
- Summay Chapter 6 and 8(Paul Goodwin and George Wright).docxDiunggah olehZulkifli Said
- Probability ClassExamplesDiunggah olehAnchal Gupta
- rubric templateDiunggah olehapi-241643318
- probabilityDiunggah olehapi-253901565
- 3rd Periodic Exam in Math 10Diunggah olehLiam Ray
- Exercise Probability.docxDiunggah olehMalik Mohsin Ishtiaq
- Unit-3 Probabilistic ReasoningDiunggah olehश्री निशान्तनारायणः द्विवेदी
- Statistical TablesDiunggah olehJames Norton
- Hasil Uji 2ndDiunggah olehanon_614888843
- StatisticsDiunggah olehfarbods0
- 4BUS1043AFB SemA3 - Pre Lecture-1Diunggah olehDaniel Karunanamage-Valdez
- QUANTITATIVE_TECHNIQUES_IN_BUSINESS.pdfDiunggah olehPuja Sharma
- jdm10119Diunggah olehHamedullah

- 5-CEN6016-Chapter1 (1)Diunggah olehsumit jain
- AdaptiveRFID HamidDiunggah olehYackeline Ternera Pertuz
- value of gDiunggah olehAnaya Choudhry
- math 3-31Diunggah olehapi-254640679
- Birkeland, Trygve.pdfDiunggah olehjosesito_amoroso2005
- MIST Maxsurf Training Day-3Diunggah olehmanon160
- Experimental Problems in PhysicsDiunggah olehais3000
- SPREADSHEET DISTILLATION calc.pdfDiunggah olehArunkumar
- Formulation of Linear Programming Model - UpdatedDiunggah olehArslan Hamid
- All Purpose Excel Sheet Conversions)Diunggah olehabdulwasayqazi
- Boltzmann Machine 3Diunggah olehaasddef
- 12 Maths Key Notes Ch 04 DeterminantDiunggah olehYazhisai Selvi
- Topic 3 Oscilloscope and Signal GeneratorDiunggah olehChin
- grad requirements in englishDiunggah olehapi-235542267
- MR Fluids-Chapter 2Diunggah olehEmir Acevedo
- XI-Solution-2016-annual.pdfDiunggah olehSindhu Jatt
- Adab, Kanniah--Modeling Forest Fire Risk in the Mortheast of Iran Using Remote Sensing and GIS TechniquesDiunggah olehRamanditya Wimbardana
- Bendre.pdfDiunggah olehaaditya01
- 1510.05594.pdfDiunggah olehradhakodirekka8732
- COMPARATIVE STUDY ON BREAKING WAVE FORCES ON VERTICAL WALLS WITH CANTILEVER SURFACESDiunggah olehJose Zamora
- Bridge CircuitsDiunggah olehkrish
- Question PaperDiunggah olehVKvicky Nigam
- AgitationDiunggah olehroxette
- NIIT rourkelaDiunggah olehSurajit Bhattacharjee
- Transport Load BuilderDiunggah olehSatyabrata Nath
- Case Study 1 Identifying the ProblemDiunggah olehMajenta Ocampo
- Determination of the Concrete Chloride Diffusion Coefficient Based OnDiunggah olehdimitrios25
- Study of Implementing Automated Attendance System Using Face Recognition TechniqueDiunggah olehSamathu
- ImageProcessing10-Segmentation(Thresholding)Diunggah olehkevinmarquez
- documents%5Celemsur%5Cboardprob1.docDiunggah olehPaul Lee