Purchase Solution

Model decisions involving uncertainty

Not what you're looking for?

Ask Custom Question

Please help answer the following question.

Can you describe how to model decisions involving uncertainty? Discuss the various strategies and please also include examples in the solution.

Purchase this Solution
Solution Summary

This solution helps explains model decisions involving uncertainty. It discusses various strategies designed to model decisions, including rational expectations, sensitivity analysis and Monte Carlo simulations. The explanation is provided in 368 words.

Solution Preview

Question: Can you describe how to model decisions involving uncertainty?

Solution:
Almost all practical problems involve some type of uncertainty. There are a number of strategies designed to model this type of decision. Suppose we are trying to model a consumer who is making a decision about how to save for retirement. He knows that investing in the stock market is a good idea in stable economic times, but that when the economy has a downturn, he can lose quite a bit. He also knows that he can put the money under his mattress, and be fairly certain his house ...

Purchase this Solution
Free BrainMass Quizzes
Transformational Leadership

This quiz covers the topic of transformational leadership. Specifically, this quiz covers the theories proposed by James MacGregor Burns and Bernard Bass. Students familiar with transformational leadership should easily be able to answer the questions detailed below.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Basic Social Media Concepts

The quiz will test your knowledge on basic social media concepts.

Marketing Management Philosophies Quiz

A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.

Organizational Leadership Quiz

This quiz prepares a person to do well when it comes to studying organizational leadership in their studies.

View More Free Quizzes
Related BrainMass Solutions

  • Decisions and Queues

    Describe the types of decisions that do not involve uncertainty and risk and common approaches used for analyzing them. 2. Describe how to model decisions involving uncertainty. 3.

  • The Incremental Model. Political approach.

    This helps to decrease any uncertainty that might surround these decisions by allowing for interactive learning between the organization and the various environments.

  • Case Study: Dave Armstrong

    Relate the decision making process that Armstrong should undertake to the decisions that a corporation must make when facing a high degree of uncertainty. 4. Build a quantitative, data-driven model to help reach a conclusion.

  • Mintzberg's incremental decision process model.

    This helps to decrease any uncertainty that might surround these decisions by allowing for interactive learning between the organization and the various environments.

  • Objective questions - Probability theory

    For a continuous distribution involving a continuous random variable X, P(X <= 100) = P(X < 100). F 5. Deterministic techniques include uncertainty and assume that there can be more than one model solution.

  • Mathematical model and computer simulation

    Uncertainty analysis, in terms of modeling, will provide a relative magnitude of the reliability of the model simulation when accounting for uncertainty in the model design as well as uncertainty in the model inputs.

  • Rational and Carnegie Decision Making

    This decision making model includes two sets of restraints, which are uncertainty and conflict. There is uncertainty in the worth of information, as it is determined and the several players have many restraints.

  • Managerial Decision Making

    They value decisions that give them independence. When facing a difficult situation, they rebel. Make choices in face of uncertainty: In face of uncertainty, such managers make decisions that are aesthetic and intelligent.

  • Capital Rationing Model

    Lastly, discuss the new model (M2) proposed by the authors. Why is this the better model? How do you see it being used in health care? Capital Rationing Problems under Uncertainty Most organizations are in the business of making money.

View More Related Solutions