TI-Unand, 2014

ELEMENT OF DECISION
PROBLEMS

Larkin Oil
Bill Mills shuffled his feet. The Spill Oil

Contingency Plan Committee was supposed

to come up with a concrete proposal for the
top management of Larkin Oil, Inc.
The committee members had lots of time;
the CEO had asked for recommendations
within three months. This was their first
meeting.

 Over the past hour, Peter Wilton and Bob

Brown had argued about exactly what level of

resources should be committed to planning
for a major oil spill in the companys main
shipping terminal bay.
Look, said Peter. Weve been over this so
many times. When, and if, an oil spill actually
occurs, we will have to move fast to clean up
the oil. To do that, we have to have
equipment ready to go.

 But having equipment on standby like that

means tying up a lot of capital, Bob replied. As

a member of the financial staff, Bob was
sensitive to committing capital for capital that
would be idle all the time and might actually
have to be replaced before it was ever used.
Wed better off keeping extensive records,
maybe just a long list of equipment that would
be useful in a major cleanup. We need to know
where it is, what its capable of, what its
condition is, and how to transport it.

 Come to think of it, our list will also have to

include information on transportation

equipment and strategies, Leslie Taylor added.
Bill finally stirred himself. You know what
bother me? Were talking about these
alternatives, and the fact that we need to do
thus and so in order to accomplish such and
such. Were getting the cart before the horse.
We just dont have our hands on the problem
yet. I say we go back to basics. First, how could
an oil spill happen?

 Easy, said Peter. Most likely something

would happen at the pipeline terminal.

Something goes wrong with a coupling, or
someone just doesnt pay attention with
loading oil on the ship. The other possibility
is that a tankers hull fails for some reason,
probably from running aground because of
weather.

 Weather or not be the problem, suggested

Leslie. What about incompetence? What if

the pilot gets drunk?
Tom Kelso always was able to imagine
unusual scenarios. And what about the
possibility of sabotage? What if a terrorist
decides to wreak environmental havoc?

 Okay, said Bill. In terms of the actual

cleanup, the more likely terminal spill would

require a different kind of response than the
less likely event of a hull failure.
In a planning for a terminal accident, we need
to think about having some equipment at the
terminal. Given the higher possibility of such
an accident, we should probably spend
money on cleanup equipment that would be
right there and available.

I supposed so, conceded Bob. At least we would be

spending our money on the right kind of thing.
You know, theres another problem that were not
really thinking about, Leslie offered. An oil spill at
the terminal can be easily contained with relatively
little environmental damage. On the other hand, if we
ever have a hull failure, we have to act fast. If we
dont, and mind you, we may not be able to because
of weather, Larkin Oil will have terrible time trying to
clean up the public relations as well as the beaches.
And think about the difference in the PR problem if
the spill is due to incompetence on the part of a pilot
rather than weather or sabotage.

 Even if we act fast, a huge spill could still be

nearly impossible to contain. Bill point out. So

whats the upshot? Sounds to me like we need

someone who could make a decision
immediately about how to respond. We need to
recover as much oil as possible, minimize
environmental damage, and manage the public
relations problem.
And do this all efficiently, growled Bob Brown.
We still have to do it without having tied up all
the companys assets for years waiting for
something to happen.

Decision Making Process

Identify the
problem
A

Identify objectives
and alternatives
Decompose and
model the problem
Choose the best
alternative
A

Sensitivity Analysis

Is further analysis
needed?
N

Implement the
chosen Alternative

How should decision making

process begin?
Given a complicated problem, how should

one begin?
A critical first step is that of identifying the
elements of the situation.

Elements of the problem

Decision to make

Uncertain events
The value of specific outcomes

Decision to make
Imagine a farmer whose trees are laden with

fruit that is not ripe yet

If the weather forecasts:
mild weather there is nothing to worry about

freezing weather it might be appropriate to

spend money on protective measures that will

save the crop.

 In such situation, the problem has:

a decision to make: whether or not to take

protective action
A decision: at least two alternatives
There may be a wide variety of alternatives
He may have several strategies for saving the crop
For example: wait and obtain more information But,
there may be not enough time to take action. The later
the decision, the worse outcome might be obtained.
Another possibility: Taking out insurance.
And also: Taking no action

Sequential decisions
In many cases, there simply is no single

decision to make, but several sequential

decision.
The orchard example: Suppose that several
weeks of the growing season remain.
Each day the farmer will get a new weather

forecast, and each time there is a forecast of

adverse weather it will be necessary to decide
once again whether to protect the crops.

 When a decision situation is complicated by

sequential decisions, a decision maker

generally will want to consider them when
making the immediate decision.
Furthermore, the future decision may depend
on exactly what happened before.

 Sequential decisions

The decision maker must consider decisions

to be made now and later
First
Decision

Second
Decision

Third
Decision

Now

TIME LINE

Last
Decision

Uncertain events
In the previous discussion:
the decision problem can be complicated because

of uncertainty about what the future holds

Many important decisions must be made without
knowing exactly:
what will be happen in the future or
what the ultimate outcome will be from a decision
made today.

 Example:
In a stock market, one investor will buy some

stock, but in what company?

Some share prices will go up and others down
Moreover, the market as a whole may move up or
down, depending economic forces.

The best thing to do:

the investor have to think carefully about the

chances associated with each securitys price as

well as the market as a whole

Uncertain Events and Sequential Decision

Resolved
before last
decision

Resolved
Resolved
before second before third
decision
decision

Resolved after
last decision

Uncertain
Events

First
Decision

Second
Decision

Third
Decision

Now

TIME LINE

Last
Decision

Outcomes and values

After the last decision has been made and the
last uncertain event has been resolved, the

decision makers fate is finally determined.

It may be a matter of profit or loss as in the case
of farmer.
It may be a matter of increase in the investors
portfolio value.
In some case the final outcome may be a net
value figure that account for both cash outflows
and inflows during the time sequence of the
decisions.

Including the outcomes

Resolved
before second
decision

Resolved
before last
decision

Resolved after
last decision

Uncertain
Events

Outcomes
First
Decision

Last
Decision

Second
Decision

Planning
Horizon

Now

TIME LINE

The time value of money: A special

kind of trade-off
One of the most common outcomes in personal

and business decision is a stream of cash flows.

One investor may spend money on a project (an
initial cash outflows) to obtain revenue in the future
(cash inflows) over a period of years.
There is a special kind of trade-off: spending dollars
today to obtain dollars tomorrow.
If a dollar today were worth the same tomorrow, there

would be no problem.
In general, we talk about the present value of an amount
x that will be received at the end of n time periods

Larkin Oils Problem

Weather for
clean up

Location

Accident

Weather

Cause

Policy
Decision

Cost

Environmental
damage

Action
Management
Decision

Now

TIME LINE

Outcomes
Cost
Environmental
damage
PR damage

TI_Unand, 2012

Persoalan Texaco vs Penzoil

Awal Tahun 1984, Penzoil dan Getty Oil setuju untuk

merger. Tetapi sebelum dokumen formal

ditandatangani, Texaco menawarkan kepada Getty Oil
harga yang lebih baik. Pimpinan Getty setuju dengan
penawaran Texaco.
Penzoil yang merasa dirugikan, ingin menuntut Texaco
ke pengadilan.
Namun Texaco bersedia membayar ganti rugi $ 2 juta
Apa keputusan yang harus diambil oleh Penzoil? Terima
tawaran $ 2 juta tersebut atau tetap lanjutkan ke
pengadilan dengan keputusan final yang belum
diketahui?

Payoff ($ Billion)
Accept $2 Billion
2

Texaco Accept $5 Billion

5
10.3

Counter over
$5Billion

Final Court
Decision

Texaco Refuses
Counterover

Texaco
Counterover
$3 Billion

Refuse

10.3
Final Court
Decision

5
0

Accept $3 Billion

Decision Tree and EMV

Payoff ($ Billion)

Accept $2 Billion
2

Texaco Accept $5 Billion

(0.17)

5
(0.2)

Final Court (0.5)

Decision

Counter over
$5Billion

Texaco Refuses
Counterover (0.50)

Texaco
Refuse
Counterover
$3 Billion (0.33)

10.3
5

(0.3)

(0.2)

10.3

Final Court (0.5)

Decision

(0.3)

Accept $3 Billion

Trade Ticket With

Friend or Keep It
Trade Ticket

Keep Ticket

Win 25
(0.20)

24

Lose
(0.80)

-1

Win 10
(0.45)

10

Lose
(0.55)

 EMV (Keep Ticket) = 0.45*10 + 0.55*0 = $4.5

EMV (Trade Ticket) = 0.20*24 + 0.80*(-1) = $4
Trade

$4

Ticket

Keep
Ticket

$4.5

Texaco vs Pennzoil
EMV (Court Decision) =
[P(Award=10.3)x10.3] + [P(Award=5)x5]+ [P(Award=0)x0]

EMV (Court Decision) = 0.2x10.3+0.5x5+0.3x0 = 4.56

Texaco vs Pennzoil

Expected Value

Accept $2 Billion
2

Texaco Accept $5 Billion

(0.17)

Counter offer
$5Billion

Texaco Refuses
Counteroffer (0.50)

Texaco
Refuse
Counteroffer
$3 Billion (0.33)

4.56

4.56

Accept $3 Billion

Texaco vs Pennzoil

Expected Value

Accept $2 Billion
2
5

Texaco Accept $5 Billion

(0.17)

Counter offer
$5Billion

Texaco Refuses Counteroffer

4.56

(0.50)

Texaco Counteroffer $3 Billion

4.56

(0.33)

 EMV (Counteroffer $5 Billion) =

[P(Texaco Accepts)x5] + [P(Texaco Refuses)x4.56]+
[P(Texaco Counteroffer $3 Billion)x4.56]

EMV (Counteroffer $ 5 Billion) =

0.17x5 + 0.5x4.56 + 0.33x4.56 = 4.63

Accept $2 Billion

Counteroffer $5 Billion

Expected Value
2

4.63

Texaco vs Pennzoil

Payoff ($ Billion)

Accept $2 Billion
2

Texaco Accept $5 Billion

(0.17)
4.56

Counter over
$5Billion

4.63

Texaco Refuses
Counterover
(0.50)

Texaco
Refuse
Counterover
$3 Billion (0.33)
4.56

5
(0.2)

Final Court (0.5)

Decision

10.3
5

(0.3)

(0.2)

10.3

4.56
Final Court (0.5)
Decision

(0.3)

Accept $3 Billion

TI Unand, 2014

Pendahuluan
Mengapa pengambilan keputusan penting
Contoh persoalan keputusan

 Tujuan Pembelajaran:
Mahasiswa mampu memodelkan struktur persoalan
keputusan (1 kriteria) agar dapat diambil keputusan
yang secara empiris lebih baik
Mahasiswa dapat menggunakan beberapa konsep
pengambilan keputusan multikriteria

Contoh Persoalan
Persoalan Texaco vs Penzoil
Awal Tahun 1984, Penzoil dan Getty Oil setuju untuk
merger. Tetapi sebelum dokumen formal
ditandatangani, Texaco menawarkan kepada Getty Oil
harga yang lebih baik. Pimpinan Getty setuju dengan
penawaran Texaco.
Penzoil yang merasa dirugikan, ingin menuntut Texaco
ke pengadilan.
Namun Texaco bersedia membayar ganti rugi $ 2 juta
Apa keputusan yang harus diambil oleh Penzoil? Terima
tawaran $ 2 juta tersebut atau tetap lanjutkan ke
pengadilan dengan keputusan final yang belum
diketahui?

 Pemilihan lokasi pabrik

Ingin ditentukan di mana lokasi pabrik tertentu akan
didirikan.
Terdapat 4 alternatif lokasi yang mungkin untuk dipilih.

Hasil ($ juta)
Terima $ 2 juta
5
Texaco Setuju $ 5 juta
5

Minta
$ 5 juta

10.3
Texaco Menolak
$ 5 juta

Putusan Final
Pengadilan

5
0

Texaco Menawar
$ 3 juta

Tolak
$ 3 juta

10.3
Putusan Final
Pengadilan

5
0

Terima $ 3 juta

Pemilihan Lokasi Pabrik

Alternatif

Bahan Baku

Pasar

Tenaga Kerja

Infrastruktur

Lokasi 1

Lokasi 2

Lokasi 3

Lokasi 4

Langkah Pengambilan
Keputusan

1. Model struktur
persoalan
2. Model
ketidakpastian
3. Model preferensi

1. Identifikasi
Permasalahan

6. Implementasi
alternatif
terpilih

2. Identifikasi
obyektif dan
alternatif

5. Analisis
Sensitivitas

3. Dekomposisi
dan modelkan
persoalan

4. Pemilihan
Alternatif

Pembelajaran
MingMateri
gu
1 Pengantar
2

3
4
5
6
7
8

Pemodelan Keputusan:
Unsur-unsur dalam
Pengambilan Keputusan
Penstrukturan
Keputusan
Penetapan Pilihan
Analisis Sensitivitas
Presentasi I
Presentasi I (lanjutan)
UTS

MingMateri
gu
9 Kreativitas dalam
Pengambilan Keputusan
10 Perilaku Resiko dalam
Pengambilan Keputusan
11 Obyektif yang bertentangan:
Konsep Dasar
12 Model Multi Atribut
13 AHP
14 Presentasi II
15 Presentasi II (lanjutan)
16 UAS

Evaluasi:
1. Tugas
2. Aktivitas dalam pembelajaran
3. Presentasi
4. UTS
5. UAS
Referensi:

Clement, R.T. 1992. Making Hard Decision. PWSKent Publishing Company, Boston

 Kesepakatan:
Kehadiran: 80%
Toleransi Keterlambatan: 15 menit (minggu 2 dan 3)
Pakaian-rambut:

No T-shirt
No trousers for women
No long hair for men

 Ketua Kelas: Sandi Kurnia (082382011562)

SENSITIVITY ANALYSIS
TI-Unand, 2014

Eagle Airlines

Dick Carothers, President of Eagle Airlines, have

been considering his operation, and now the
opportunity was available. An acquaintance had
put him in contact with the president of a small
airline in the Midwest that was selling an airplane.
Many aspects of the situation needed to be thought
about, however, and Carothers was having a hard
time sorting them out.

Eagle Airline owned and operated three-twin engine aircraft. With

this equipment, Eagle provided both charter flights and scheduled
commuter service among several communities in the eastern United
States.
Scheduled flights continued approximately 40% of Eagles flights,
averaging only 90 minutes of flying time and a distance of some
300 miles. The remaining 60% of flights were chartered.
The mixture of charter flights and short scheduled flights had
provide profitable, and Charoters felt that he had found a niche for
his company. He was aching to increase the level of service,
especially in the area of charter flights, but this was impossible
without more aircraft.

A Piper Seneca was for sale at a price of $95,000, and Carothers

figured that he could buy it for between $85,000 and $90,000. This
twin-engine airplane had been maintained according to FAA
regulations. In particular, the engines were almost new, with only
150 hours of operation since a major overhaul.
Furthermore, having been used by another small commercial charter
service, the Seneca contained all of the navigation and
communication equipment that Eagle required. There were seats for
five passengers and the pilot, plus room for baggage. Typical
airspeed was approximately 175 nautical miles per hour (knots), or
200 statute miles per hour (mph).

Operating cost was approximately $245 per hour,

including fuel, maintenance, and pilot salary. Annual
fixed costs include insurance ($20,000) and finance
charges.
Carothers figured that he would have to borrow
some 40% of the money required, and he knew that
the interest rate would be two percentage points
above the prime rate (currently 9.5% but subject to
change).

Based on his experience at Eagle, Carothers knew, that

he could arrange charters for $300 to $550 per hour
or charge a rate of approximately $100 per person
per hour on a scheduled flights. He could expect on
average that the scheduled flights would be half full.
He hoped to be able to fly the plane for up to 1000
hours per year, but realized that 800 might be more
realistic. In the past, his business had been
approximately 50% charter flights but he wanted to
increase that percentage if possible.

The owner of the Seneca had told Carothers that he

would either sell the airplane outright or sell Carothers
to purchase it within a year at a specific price. (The
current owner would continue to operate the plane
during the year).
Although the two had not agreed on a price for this
option, the discussion had led Carothers to believe that
the option would cost between $2500 and $4000. Of
course, he could always invest his cash in the money
market and expect to earn about 8%.

As Carothers pondered this information, he realized

that many of the numbers that he was using were
estimates. Furthermore, some were within his control (for
example, the amount financed and prices charged)
while others, such as the cost of insurance or operating
cost, were not. Was it worth considering?
Last, but not least, did he really want to expand the
fleet? Or was there something else that he should
consider?

Identify
The

Decision to Make
Uncertain Event
The Outcomes

Model the Eagle Decision Problem!

Influence Diagram
Operating
Cost
Hours
Flown

Insurance

Total
Cost

Capacity of
Scheduled
Flight

Revenue
Charter
Price

Price
Financial
Cost
Interest
Rate

Ratio
Charter/
Scheduled

Ticket
Price
PROFIT

Proportion
Financial

Purchase
Seneca?

Input Variables and Ranges of Possible

Values
Variable

Base Value

Lower Bound

Upper Bound

Hours Flown

800

500

1000

Charter Price/Hour

$325

$500

$550

Ticket Price/Hour

$100

$95

$108

Capacity on
Scheduled Flights

50%

40%

60%

Ratio of Charter to
Scheduled Flights

50%

45%

70%

Operating
Cost/Hour

$245

$230

260

Insurance

$20,000

$18,000

$25,000

Proportion
Financed

0.40

0.30

0.50

Interest Rate

11.5%

10.5%

13%

Purchase Price

$87,500

$85,000

$90,000

Tornado Diagram
Capacity on Scheduled Flights
Operating Cost/Hour
Hours Flown
Charter Price/Hour
Ratio of Charter to Scheduled Flights
Ticket Price/Hour
Insurance
Proportion Financed
Interest Rate
Purchase Price
-15000

-10000

-5000

5000

10000

15000

Expected Profit

20000

25000

30000

35000

Capacity of Scheduled Flights

Two-way Sensitivity Analysis

0.6
Profit >4200

0.55

Base
value

0.5

0.45

Profit <4200

0.4
230

235

240

245

250

Operating Cost ($)

255

260

Operating
Cost
SENSITIVITY TO
PROBABILITIES

Capacity of
Scheduled Flights
45%
(q)

$253
(p)

55%
(1-q)

Hours
Flown
650 (r)

-9,725

900 (1-r)

-4,225

650 (s)

6,525

900 (1-s)
650 (r)

Purchase
Piper
Seneca
$237
(1-p)

45%
(q)
55%
(1-q)

Do Not Purchase
Earn 8% of $52,500

Payoff ($)

18,275
675

900 (1-r)

10,175

650 (s)

16,925

900 (1-s)

32,675

4,200

Operating
Cost

Capacity of
Scheduled Flights

STRATEGY
REGIONS

45%
(q)
$253
(0.5)

55%
(1-q)

Purchase
Piper
Seneca

Hours
Flown
650 (r)

-9,725

900 (1-r)

-4,225

650 (0.8r)

6,525

900 (1-0.8r)
650 (r)

45%
(q)
$237
(0.5)
55%
(1-q)

Do Not Purchase
Earn 8% of $52,500

Payoff ($)

900 (1-r)

18,275
675
10,175

650 (0.8r)

16,925

900 (1-0.8r)

32,675

4,200

Strategy Region Graph

q

1
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0

Invest in Money Market

Purchase Seneca

0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1

TI-Unand, 2014

Objective:
To show the roles of influence diagrams and

decision trees in the decision structuring process

Having identified the elements of a decision

problem, how should one begin the modeling
process?
Two approaches for structuring problems:
Influence diagram

Decision trees

An influence diagram provides a simple

representation of a decision problem.
The element of a decision problem:
The decision to make
Uncertain event

The value of outcomes

Show up in different shapes

Linked with arrows to show
the relationship among the
elements:

Elements
Decision

Representation

Chance event

Decision
nodes
Chance nodes

Value

Value nodes

Nodes are put together in a graph, connected by arrows (arcs)

Node at the beginning of an arc: Predecessor
Node at the end of an arc: Successor

A venture capitalists problem in deciding

whether to invest in a small business.
In fact, the entrepreneur will be able to obtain

financial backing from some source.

The only problem is that the proposed is
extremely risky, more so than most new ventures.
The venture capitalist must decide whether to
invest in this highly risky undertaking.

If she invests,
she may be able to get in on the ground floor of a

highly successful business.

On the other hand, the operation may fail
altogether.

The capitalists dilemma is

whether the chance of getting in on the ground

floor of something big is worth the risk of losing

her investment entirely.

If she does not invest, she may leave her

capital in the stock market or invests in other
less risky venture.
Venture
Succeeds or
Fail

Invest?

Value

The outcome of A is relevant

for assessing the chances
associated with Event B

Decision C is relevant for

assessing the chances
associated with Event D

The decision maker knows

the outcome of Event E
when making Decision F

The decision G is made

before Decision H

Market
Activity

Outcome
Market Up

Market Down

Investment
choice

Payoff

Choices:

Choice:

Stock
market
outcome

Savings

Savings

Up

200

Down

200

Up

500

Down

-400

Stocks
Stocks

Payoff

Problem of defective products

A manufacturing plant managers faces a
string of defective products and must decide
what action to take.
He has dispatched his maintenance engineer
to a preliminary inspection of machine 3
which is suggested to be the source of the
problem.

Possible Reports:

Engineers
Report

Machine 3
OK?

Outcome

I think, 3 needs fixing

3 OK

I think, 3 is OK

3 Not OK

Managers
Decision
Choices:
Change Products
Replace 3

Payoff
Choice:

Outcome Payoff

Change
Products

3 OK

Replace 3

3 OK

Behind schedule, costly

3 Not OK

On schedule, costly

3 Not OK

Behind schedule

Possible Forecast:

Forecast

Hurricane
Path

Outcome

Will hit Miami

Hits Miami

Will miss Miami

Misses Miami

Payoff

Decision
Choices:

Choice:

Outcome

Evacuate

Evacuate

Hits Miami

Stay

Misses Miami
Stay

Payoff
Safety, high cost

Hits Miami

Danger, low cost

Misses Miami

Safety, low cost

Revenue

Introduce
Product?

Cost

Profit

Price

Introduce
Product?

Units
Sold

Fixed
Cost

Profit

Variable
Cost

Price

Introduce
Product?

Units
Sold

Fixed
Cost

Revenue

Cost

Profit

Variable
Cost

Bomb-detection
System Choice

Detection
effectiveness

Time to
implement

Passenger
Acceptance

Overall
satisfaction

Cost

Weather
Day 1

Weather
Day 2

Weather
Day n

Forecast
Day 1

Forecast
Day 2

Forecast
Day n

Protect
Day 1?

Protect
Day 2?

Protect
Day n?

Payoff
Day 1

Payoff
Day 2

Total
Payoff

Payoff
Day n

The Environmental Protection Agency (EPA)

often must decide whether to permit the use of
an economically beneficial chemical that may be
carcinogenic (cancer-causing).
Furthermore, the decision often must be made
without perfect information about either the
long-term benefits or health hazards.
Alternative courses are

to permit the use of the chemical,

restrict its use, or
ban it altogether.

Usage
Decision
Economic
Value
Cancer
Cost

Net
Value

Tests can be run to learn something about the

carcinogenic potential of the material, and survey
data can indicate the extent of exposure when people
use the chemical.
These pieces of information are both important in
making the decision.
For example,

if the chemical is only mildly toxic and human exposure is

minimal, then restricted use may be reasonable.

On the other hand, if the chemical is only mildly toxic, but
people are widely exposed, then banning its use may be
imperative.

Usage
Decision
Economic
Value

Human
Exposure
Cancer
Risk
Carcinogenic
Potential

Cancer
Cost

Net
Value

Venture succeed

Invest

Venture fails

Do not Invest

Large investment return

Fund lost

Less risky investment

Typical Return

Basic Risky Decision

Run for Reelection

US Representative
(Intermediate)
Win

US Senator
(Best)

Lose

Lawyer
(Worst)

Run for
Senate

Double-Risk Decision

Run for
Reelection

Win

Lose
Win

US Representative

Small-time lawyer

US Senator

Run for
Senate
Lose
Big-time lawyer

Range of Risk Decision

Accept settlement

Known Amount

Highest

Reject
settlement

Amount of court award

Lowest

Imperfect Information

Hurricane
Danger, Low cost
Hits Miami

Stay
Forecast: Will
Hit Miami

Hurricane Safety, Low cost

Misses Miami

Evacuate
Hurricane
Hits Miami
Forecast: Will
Miss Miami

Stay

Safety, High cost

Danger, Low cost

Hurricane
Safety, Low cost
Misses Miami
Evacuate

Safety, High cost

Multiple Objective and Trade-offs

Job Offer 1

Job Offer 2

Madison, Wisconsin:
Low Salary

Chicago, Illinois:
High Salary

Sequential Decision

Forecast
Day 1

Decision
Day 1

Weather
Day 1

Forecast
Day 2

Decision
Day 2

Weather
Day 2

Total
Payoff