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Decision Science
December 2023 Examination
Q1. Draw the decision tree diagram and explain the best possible decision based on EMVs
(expected Monetary Values) On the 1st April 2023, Rajinder Saproo, an investor is in a dilemma for the investment of 10 lakh INR. He has consulted his Mumbai based friend, MukulBhai Gadhecha, an investment expert for this matter. Mr Saproo went to meet him at his office located at Prabhadevi. Mukulbhai asked him to express his feeling for the market situation in coming economic year.
Mr Saproo assumed the economic growth for the coming year in the following way.
10 % optimist for the ‘Good Economic Growth’
50 % optimist for the ‘Moderate Economic Growth’
40 % optimist for the ‘Lower Economic Growth’.
In addition to this, MuKulbhai Gadhecha carried out his analysis to derive possible payoff values considering the various investment options as per the economic situations (presented in the table given below). Figures are in INR on the investment of whole amount of 10 lakhs.
Options Good Economic
Growth Moderate Economic
Growth Lower Economic
Growth’
Mauti Suzuki Shares 3,00,000 1,20,000 50,000
TATA Motor Shares 4,00,000 1,00,000 10,000
D Mart shares 4,50,000 2,30,000 30,000
If you were in place of Mukulbhai Gadhecha, What do you recommend to Mr. Saproo?
Note: You are not allowed to use any software for the calculation. But for the preparation of
Decision tree diagram you are advised to use Software like MS -Word, PowerPoint etc.
(10 Marks)
Solution Q. 1
Title: Investment Recommendation for Mr. Saproo Using Expected Monetary Values (EMVs)
Introduction:
Mr. Rajinder Saproo, an investor with 10 lakh INR, sought the know-how of MukulbhaiGadhecha, an investment expert based in Mumbai. Mukulbhai became tasked with advising Mr. Saproo on the optimal investment choice given sure economic growth scenarios. Mr. Saproo’s notion of the financial landscape for the upcoming year became divided into three procedures: 10% optimistic about ‘true economic growth,’ 50% confident about ‘moderate economic increase,’ and 40% happy about ‘lower financial increase.’ Mukulbhai Gadhecha
Q2. Draw the appropriate chart using MS EXCEL, also carryout Exponential Smoothing model in MS EXCEL for the given Alpha values, copy the results (from EXCEL to Word) and explain which alpha is relatively better for the forecast. In this journey of identification of relatively better way of forecasting you may take the support of MAD and MSE type of errors. Suggested Alpha values are 0.1, 0.2, 0.5, 0.7, 0.9. (10 Marks)
Yield of
Groundnut
(Kg./hectare)
2000-01
977
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
1127
694
1357
1020
1187
866
1459
1163
991
1411
1323
995
1764
1552
1465
1398
1893
1422
2063
1703
1758
Data Source: RBI
SOLUTION
The Quest for the Optimal Alpha:
Inside the realm of forecasting, we embark on a quest to unveil the alpha value that holds the key to superior predictive powers. Our journey takes us through the dense forest of mean Absolute Deviation (MAD) and the treacherous terrain of suggest-squared mistakes (MSE). These metrics will be our guiding stars in this odyssey.
The Contestants:
Our noble contestants are alpha values—0.1, 0.2, 0.5, 0.7, and 0.9. each Alpha seeks to prove its worth in the forecasting world, but only one shall emerge victorious.
Q3. A) You are not advised to use Software in this case, show the calculation-steps typed in your MS-word file.
In Roshni lights ( manufacturer of Mirchi lights) A production run of 2000 set of Mirchi lights being tested for the life, the data shows that life is normally distributed with an average life span of 90 days and a standard deviation of 10 days. What is the probability if a set of Mirchi lights randomly selected from that lot, survived up to 100 days? (5 Marks)
SOLUTION 3-A
To ascertain the chance of a randomly selected set of Mirchi lights from the production lot surviving for 100 days, we delve into the world of records and regular distribution. With a median life span (mean) of 90 days and a standard deviation of 10 days, we embark on a journey to calculate this probability of the usage of the fascinating world of Z-scores and the
Q3 B) Draw an appropriate chart to show the contribution of each category (in percent form) of Micro, small and medium Enterprises (MSMEs) at the state level. (You may use the MS EXCEL). In conclusion also write, why you have chosen this graph for this problem? (5 Marks)
StateName DistrictName Total
MSMEs Micro Small Medium
UTTARAKHAND ALMORA 1235 1068 150 17
UTTARAKHAND BAGESHWAR 838 807 29 2
UTTARAKHAND CHAMOLI 739 688 49 2
UTTARAKHAND CHAMPAWAT 802 745 55 2
UTTARAKHAND DEHRADUN 12605 10600 1909 96
UTTARAKHAND HARIDWAR 8883 6416 2263 204
UTTARAKHAND NAINITAL 3752 3003 675 74
UTTARAKHAND PAURI GARHWAL 4955 4678 264 13
UTTARAKHAND PITHORAGARH 1061 962 95 4
UTTARAKHAND RUDRA PRAYAG 740 698 37 5
UTTARAKHAND TEHRI GARHWAL 1399 1227 162 10
UTTARAKHAND UDHAM SINGH NAGAR 9746 7767 1839 140
UTTARAKHAND UTTARKASHI 1114 1002 111 1
Data source: OGD
SOLUTION 3-B
Reasons for Choosing a Stacked Bar Chart:
Comparative Clarity: The number one objective is to offer a clear, visible assessment of the contributions made by Micro, Small, and Medium enterprises to the overall range of MSMEs in each district of Uttarakhand. A stacked bar chart excels on this, presenting those contributions facet through side within each section. This visible contrast is crucial for
Dear students, get fully solved assignments by professionals
Do send your query at :
help.mbaassignments@gmail.com
or call us at : 08263069601
(Plagiarism proofed assignments available with 100% surety and refund)