Heading: Analyzing Risky Decisions

question 42

Multiple Choice

Heading: Analyzing Risky Decisions
**Reference: Use the decision tree along with the given probabilities to answer the next six questions
Probability Event A = 30% Probability Event B = 70%
Probability Event 1 = 58% Probability Event 2 = 42%
Probability of Event A given that Event 1 occurs = 16%
Probability of Event B given that Event 1 occurs = 84%
Probability of Event A given that Event 2 occurs = 50%
Probability of Event B given that Event 2 occurs = 50%

-*If the decision maker chooses Decision A and Event 1 occurs, which decision alternative should the decision maker choose at node D?

• A)Decision 1
• B)Decision 2
• C)Either Decision; they both have the same expected value.
• D)Neither Decision; more information is needed.

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Definitions:

Forecasting Envelope

A method used to predict the future range of possible outcomes for various scenarios, often used in planning and budgeting.

Projection

A forecast or estimate of future situation or trend based on a study of present conditions.

Contingency Plans

Preparatory measures designed to help organizations rapidly respond to unexpected events or emergencies.

HR Forecasting Predictions

Estimations made about future human resources needs based on current data, trends, and analysis to guide hiring and workforce development practices.