Make decision based on expected monetary value

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Bill Foster 6 years, 2 months ago

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Name	Status	Author	Last Modified
Make decision based on expected monetary value	Ready to use	Newcastle University Mathematics and Statistics	20/11/2019 14:51
Simon's copy of Make decision based on expected monetary value	draft	Simon Thomas	13/05/2019 10:09

Question statement

{Something} {hasdonethis} {decision}

A. {Cat[0]}

B. {Cat[1]}

C. {Cat[2]}

{info} has the following probabilities associated to the following {outcomes} for the {product}:

{Att[1]}, {Att[2]} or {Att[3]}.

{table([['<strong>Probability</strong>']+p],Att)}

The next table shows {expectedreturn} for each option against these {outcomes}:

{table(b,Att)}

Give any introductory information the student needs.

			Name	Type	Generated Value

a20	integer	48
a21	integer	28
a22	integer	20
a02	integer	-40
a00	integer	90
a01	integer	40
outcomes	string	outcomes
something	string	A car accessory company, Marla
maxemv	number	37.5
decision	string	and has to decide whether to:
units	string	thousands of pounds
correct	string	Market the product nationwide
a	list	Nested 3×3 list
product	string	product
a11	integer	30
a10	integer	68
a12	integer	5
b	list	Nested 3×4 list
p2	number	0.40
p3	number	0.25
p1	number	0.35
mm	list	[ 1, 0, 0 ]
info	string	Initial market research
cat	list	List of 3 items
p	list	[ 0.35, 0.40, 0.25 ]
att	list	List of 4 items
emv	vector	vector(37.5,37.05,33)
expectedreturn	string	the Marketing Director`s thoug
hasdonethis	string	has developed a new car immobi

Automatically regenerate variables?

Name

Data type

Value

xxxxxxxxxx
 
round(a10*random(0.7..0.85))

JME function reference

Description

Describe what this variable represents, and list any assumptions made about its value.

Can an exam override the value of this variable?

Generated value: `integer`

← Depends on:

→ Used by:

This variable doesn't seem to be used anywhere.

Parts

Part a) Gap-fill
1. Gap Gap 0. Number entry
  Add
2. Gap Gap 1. Number entry
  Add
3. Gap Gap 2. Number entry
  Add
Part b) Choose one from a list

Gap-fill

Ask the student a question, and give any hints about how they should answer this part.

Calculate the Expected Monetary Value (EMV) for each option:

	EMV
{Cat[0]}	Gap 0.
{Cat[1]}	Gap 1.
{Cat[2]}	Gap 2.

Advice

The Expected Monetary Value for the first option: {Cat[0]} is given in four steps (all numbers below are in {units}):

1. Multiplying the probability $\var{p1}$ of a {Att[1]} outcome by the expected profit $\var{a[0][0]}$ , gives:

expected profit = $\var{p1}\times \var{a[0][0]}= \var{p1*a[0][0]}$

2. Multiplying the probability $\var{p2}$ of a {Att[2]} outcome by the expected profit, $\var{a[0][1]}$ gives:

expected profit = $\var{p2}\times \var{a[0][1]}= \var{p2*a[0][1]}$

3. Multiplying the probability $\var{p3}$ of a {Att[3]} outcome by the expected profit, $\var{a[0][2]}$ gives:

expected profit = $\var{p3}\times \var{a[0][2]}= \var{p3*a[0][2]}$

4. Finally add these three together to get the Expected Monetary Value for the option {Cat[0]} :

$\var{p1*a[0][0]}+\var{p2*a[0][1]}-\var{abs(p3*a[0][2])}=\var{emv[0]}$

You calculate in the same way for the other options - the next table gives the Expected Monetary Value for all three::

	EMV
{Cat[0]}	{emv[0]}
{Cat[1]}	{emv[1]}
{Cat[2]}	{emv[2]}

The optimal course of action is take to be that which has the highest Expected Monetary Value (EMV) and this is seen to be :

{Correct} with EMV $\var{maxemv}$ .

Give a worked solution to the whole question.

Use this tab to check that this question works as expected.

There was an error which means the tests can't run:

Part	Test	Passed?
Gap-fill
Gap-fill		Hasn't run yet
Number entry
Number entry		Hasn't run yet
Number entry
Number entry		Hasn't run yet
Number entry
Number entry		Hasn't run yet
Choose one from a list
Choose one from a list		Hasn't run yet

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Make decision based on expected monetary value

Metadata

Taxonomy: mathcentre

Taxonomy: Kind of activity

Taxonomy: Context

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Checkpoint description

Bill Foster 6 years, 2 months ago

Newcastle University Mathematics and Statistics 9 years, 3 months ago

Error in variable testing condition

Error

Warning

Generated value: `integer`

Parts

Gap-fill

Loading...

Error

Make decision based on expected monetary value

Metadata

Taxonomy: mathcentre

Taxonomy: Kind of activity

Taxonomy: Context

Contributors

Feedback

History

Comment

Checkpoint description

Bill Foster 6 years, 2 months ago

Newcastle University Mathematics and Statistics 9 years, 3 months ago

Error in variable testing condition

Error

Warning

Generated value: integer

Parts

Gap-fill

Generated value: `integer`