Discussion 1
You find yourself stranded on a deserted island with limited resources. You need to decide on the best course of action to survive until rescue arrives. Unfortunately, the timing of rescue is uncertain.
Using the concepts covered in this chapter, discuss the following:
1.
Risk vs. Uncertainty:
· Why is this situation a classic example of decision-making under uncertainty, rather than risk?
· How does uncertainty differ from risk, where you can assign probabilities to different outcomes?
2.
Expected Utility Theory:
· Imagine you have some basic survival tools and a faint signal on your radio. Expected utility theory helps make decisions under risk. Can you apply this concept if you don’t know the probability of rescue?
3.
Decision Rules under Uncertainty:
· Given the uncertainty about rescue timing, what are some decision-making rules you could consider?
· Maximax – Choose the option with the highest possible payoff (optimistic approach).
· Maximin – Choose the option with the highest payoff in the worst-case scenario (pessimistic approach).
· Minimax Regret – Choose the option that minimizes your potential regret (considering the difference between your chosen option and the best alternative outcome under each scenario).
· Equal Probability Rule – Assign equal probabilities to all possible scenarios and choose the option with the highest average expected payoff (assuming no knowledge about actual probabilities).
4.
Choosing a Strategy:
· Discuss the advantages and disadvantages of each decision rule (maximax, maximin, minimax regret, equal probability) in the context of your island survival situation.
· Which rule might be most appropriate, considering the potential consequences of each choice?
Explanation:
This question focuses on decision-making under uncertainty and different approaches to making choices when probabilities are unknown:
·
Risk vs. Uncertainty: Risk involves situations where you can assign probabilities to different outcomes. Uncertainty involves situations where the likelihood of each outcome is unknown, like the timing of your rescue on the island.
·
Expected Utility Theory: This theory helps make decisions under risk by considering the desirability (utility) of each outcome and the probability of it happening. Since you don’t know the probability of rescue, directly applying expected utility is difficult.
·
Decision Rules under Uncertainty:
· Maximax – This is an optimistic approach, focusing on the best possible outcome (e.g., focusing on getting a strong radio signal if rescue is most likely by boat).
· Maximin – This is a pessimistic approach, focusing on the worst-case scenario and minimizing potential losses (e.g., prioritizing building a shelter in case rescue takes a long time).
· Minimax Regret – This approach considers the regret you might feel if you choose the wrong option, given different rescue scenarios.
· Equal Probability Rule – This assigns equal probabilities to all rescue timings and chooses the option with the highest average payoff across those scenarios (assuming you have no better information).
Discussion 2
This week’s discussion will focus on evaluating project uncertainty and complexity. This assignment challenges you to analyze how uncertainty and complexity influence project management and explore methodologies for assessment and mitigation strategies.
Discussion Topic:
Evaluating Project Uncertainty and Complexity:
· Examine how uncertainty and complexity are identified and managed in project environments. Discuss the tools and techniques for assessing these factors and their implications on project planning and execution. Explore strategies to effectively manage risks associated with high uncertainty and complexity in projects.
Assignment Instructions:
Initial Response Guidelines:
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Written Summary: Draft a detailed summary (~400 words) based on your chosen articles, case studies, or scholarly papers. This summary should explore the impact of uncertainty and complexity on project management and highlight how these factors can be assessed and mitigated.
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Video Summary: Create a 1-2 minute video that encapsulates the key points from your research and discusses the implications of your findings for project management practices.
Formatting Your Post:
· Start your post by providing the article’s title, author (s), or case study used. Include the URL, title, and author if your source is a video.
· Ensure your submission follows APA formatting guidelines, including proper in-text citations and a reference list.
Submission Instructions:
· Post your written summary and video link in the discussion forum by the deadline.
· Late submissions will not be accepted for credit without prior arrangement with Dr. Darnell.
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Initial post due by Thursday of Week 8, @ 11:59 PM USCT
·
Replies to others are due by Sunday of Week 8, @ 11:59 PM USCT)
