Product Overview

Sankhosh Constructions Inc. has to take a decision about whether it wants to set up an office in the city of Coimbatore, at a cost of INR 30 crores. An office there would give it access to the projects funded by the city government. However, only the results of the upcoming election could decide which of these projects materialised and help Sankhosh Constructions to be profitable. The firm could also set up its office after the results of the elections were known. However, it would have access to only a fraction of the projects. Should Sankhosh Constructions set up an office in Coimbatore? If yes, now or later?

Learning Objectives

Analyse how sequential decisions are made in the absence of complete information. Compute how robust a decision is to changes in the assumed probability values. Calculate the expected value of perfect and imperfect information about uncertain events.