Purchase Solution

Making Decisions Under Uncertainty

Not what you're looking for?

Ask Custom Question

I need help with the following questions. To save on gasoline expenses, Edith and Mathew agreed to carpool together for traveling to and from work. Edith preferred to travel on I-20 highway as it was usually the fastest, taking 25 minutes in the absence of traffic delays. Mathew pointed out that traffic jams on the highway can lead to long delays making the trip 45 minutes. He preferred to travel along Shea Boulevard, which was longer (35 minutes), but rarely had traffic jams. Edith agreed that in case of traffic jams, Shea Boulevard was a reasonable alternative. Neither of them knows the state of the highway ahead of time.
After driving to work on the I-20 highway for 1 month (20 workdays), they found the highway to be jammed 3 times. Assuming that this month is a good representation of all months ahead, should Edith and Mathew continue to use the highway for traveling to work?
How would you conclusion change for the winter months, if bad weather makes it likely for traffic jams on the highway to increase to 6 days per month?
How would your conclusion change if Mathew purchased a new smart-phone app that could show the status of the highway traffic prior to their drive each morning, thus reducing the probability of them getting into a jam down to only 1day per month (where on this day, the app showed no traffic jam, but a jam developed in the meantime as they were driving along the highway).

Guided Response:
In 300 words or more, please, provide your response to the above discussion question. Please, show all your calculations and explain your answers. Further, comment on how the conclusions of this problem will change if there was no uncertainty and the highway always had traffic jams, whereas Shea Blvd was always traffic jam free? Is this scenario realistic and why? Respond substantively to at least two of your classmates' postings.

Purchase this Solution

Solution Summary

The expert examines making decisions under uncertainty.

Solution Preview

See the attached for solution.

Decision under uncertainties
There are two alternatives for Edith and Mathews:
• To drive on I-20 which is the fastest route in the absence of traffic delays
• To drive along Shea Boulevard which is longer but usually free from traffic
For a month of driving (20 days) they found highway to be jammed 3 times.
Probability of jam = 3/20 = 0.15
Probability of no jam = 1-0.15 =0.85
Total Time spent for 30 days considering 20 days month on I-20:
With delay: 3*45 = 135 minutes
Without ...

Purchase this Solution


Free BrainMass Quizzes
Introduction to Finance

This quiz test introductory finance topics.

Income Streams

In our ever changing world, developing secondary income streams is becoming more important. This quiz provides a brief overview of income sources.

Understanding Management

This quiz will help you understand the dimensions of employee diversity as well as how to manage a culturally diverse workforce.

Lean your Process

This quiz will help you understand the basic concepts of Lean.

Business Ethics Awareness Strategy

This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.