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uantitative
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easoning &
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© 2014 Pacific Crest
5. Step 8 of the methodology mentions “extreme outcomes” and “worst outcomes.. What does this
mean?
6. How do we weigh the difference between a bad outcome and an expected outcome in our decision
making process?
7. What do we do when the actual outcome turns out much worse than our expected outcome?
A
Successful Performance
Successful application of your learning looks like this
As you begin to apply what you’ve learned, you should have a good idea of what success looks like.
A SUCCESSFUL
PERFORMANCE
I analyze a complex and dynamic situation in order to decide on an effective decision. I...
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Identify random components and assign them to random variables
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Rank the degree of impact of each random variable on the potential outcomes
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Determine the implications of the most likely outcomes and severe outcomes
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Plan a course of action (decision) based upon sound predictions and risk analysis
D
emonstrate Your Understanding
Apply it and show you know in context!
1. Identify a friend or family member who is going to college next year. Help them to model the
decision of what college to choose. Would your choice of a college have been different if you had
used this model?
2. In choosing a career, how much of what you choose to do is random?
3. How much of your life is in your control and how much is simply random? Try to come up with a list
of the 5 most important factors of your life (think of your life as a “situation”) that are in your control
and the 5 most important that are random. Analyze both lists of factors for their potential influence
on your life in the future.
4. What do key marketing specialists believe about human behavior in a grocery store? Think about
what happens between when you enter the grocery store with your shopping list and what you have
actually purchased by the time you leave the store. How much difference is there between the two
and is your pattern of shopping random or predictable?