Question

Jon is considering two (mutually exclusive) investment alternatives. He can either invest in raw land or in an existing strip mall. If he invests in raw land, then in three years he will either sell it or else invest in an apartment complex to be built on the land, depending on the residential rental market at that time. If, on the other hand, he invests in a strip mall, in five years he will either sell it or else invest in expansion, depending on the commercial rental market that that time. The best way for Jon to visual his decision process is as a

A. Critical path network diagram

B. Transportation network diagram

C. Payoff table

D. Decision tree

E. Assignment problem

18. In CPM/PERT, the project life is calculated by

A. summing the times required for all activities

B. summing the times required for those activities on the critical path

C. summing the times required for those activities not on the critical path

D. summing the times required for the first and last activities of the network

E. none of the above

Answer 1

Problem 1.

Option C. Payoff table

(since, it summarizes profit and loss due to a decision in a tabular form. It lists payoffs (negative or positive returns) associated with all possible combinations of alternative actions under the decision maker's control and external conditions which are not not under decision maker's control(here commercial rental market at that time)

Problem 18.

Option B. Summarise the times required for those activities on the critical path