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464 Suggested answers to selected questions
(e) Jones Wood has the highest aggregate benefits whatever weight
is assigned to visual impact.
(6) (a) The attributes may not be mutually preference independent.
Preferences for candidates with better ideas may depend upon
their commitment to translate these ideas into action.
(d) Candidates B, C and D are on the efficient frontier.
(e) A switch from B to C would cost $45.4 per extra benefit point;
a switch from C to D: $1200 per point. The personnel manager
is prepared to pay $8000/23 = $347.8 per point, so C should be
selected.
(7) (c) Direct and Royal are on the efficient frontier.
(8) (b) (ii) The DRT and Ellton machines lie on the efficient frontier.
(9) (d) If rank sum weights are used the score for Alton is 18.
(e) The Castle and Dorset hotels lie on the efficient frontier.
(f) A switch from the Castle to the Dorset would cost $8000/59.6 =
$134 per point. The organizers are prepared to pay $6000/40 =
$150 per point so the Dorset should be selected.
(10) (b) Flowton and Barchester Universities are on the efficient frontier.
(c) A switch from Flowton to Barchester would cost $30 000/32.6 =
$920 per point. The company are prepared to pay $30 000/26.09 =
$1150 per point so Barchester University should be chosen.
Chapter 4
(1) (a) Assuming that the classical approach is valid: 120/350.
(b) Assuming that the relative frequency approach is valid: 8/400.
(c) 0.5 using the classical approach, though the relative frequency
approach suggests about 0.515 in some Western industrialized
countries.
(d) Assuming that the relative frequency approach is valid: 21/60.
(e) This will be a subjective probability.
(2) (a) 0.25; (b) 0.6; (c) 0.95.
(3) (a) 64/120; (b) 79/120; (c) 67/120; (d) 85/120; (e) 74/120.
(4) (a)(i) 41/120; (ii) 18/64; (iii) 23/56; (iv) 53/120; (v) 32/64.
(5) (a)(i) 40/l00; (ii) 30/l00; (iii) 45/l00; (iv) 25/30; (v) 25/40.
(6) (a) 0.001; (b) 0.9 × 0.95 × 0.8 = 0.684.
(7) (a) 0.192.
(8) 0.48.
(9) 0.00008.
(10) 0.6.