Study Time Case

Raquel Covington is a graduate student majoring in environmental management. In one particular class, Raquel has maintained a low A average throughout the semester, and she needs an A or a high B on the final exam to receive an A as the final grade in the course. In this course, three cases were added to the reading assignment in the last week of class, and the instructor has said there will be a 25-point question on the final exam related to one of these cases. The instructor has given no indication about which case is most likely to be included on the exam. Unexpected travel for a job interview has limited Raquel's study time in preparing for final exams, and she has not had time to read the cases. She feels prepared for the other material to be covered on this exam, and based on her experience on the other tests, she believes she will miss at most 8 points on questions related to this other material.

There are three hours remaining before the final exam in this course begins. Raquel is considering three study strategies related to the cases that she has not read. The first strategy is to spend one hour on each case. She believes that in doing this, she will be able to get 12 points out of the 25 possible regardless of which case is included on the exam. Another strategy is to select two of the three cases and spend one hour and thirty minutes on each of these. She believes that by doing this she will be able to get 20 points out of the possible 25 if either of these two cases is on the exam. A third strategy is to spend all three hours studying one case. If she does this and the case she studies is on the exam, she believes that she will get all 25 points. If it is not selected, she will get zero points.

1. State clearly the problem. What type of Decision is Raquel facing?

2. Identify the alternatives and state of nature.

3. What do you recommend? Explain your reasons for selecting this choice.

4. What would the opportunity loss be for this decision with each of the possible outcomes?