Decision analysis-maximax criterion

Reference no: EM1311272

Decision Analysis:

A payoff table (profits) is shown below.

	States of Nature
Decisions	S1	S2	S3
D1	10	8	6
D2	14	15	2
D3	7	8	9

a. Using the maximax criterion, what decision should be made by the decision maker?

b. Using the maximin criterion, what decision should be made by the decision maker?

c. Using an equal likelihood criterion, what decision should be made by the decision maker?

d. Using minimax regret criterion, what decision should be made by the decision maker?

e. If the probabilities of s1, s2, and s3 are 0.2, 0.4, and 0.4, respectively, what decision should be made by the decision maker?

Reference no: EM1311272

Questions Cloud

The pressure differences : The difference in piezometric pressure, pz,A – pz,B. Express both answers in kPa and pressure differences pA - pB.

Administrator providing the course material : Suppose it costs $25 per student for the administrators to provide the course materials.

Profit maximizing level of labor : The supply curve for labor is S L = 100W, where W is the market wage. The marginal revenue product curve for the firm is D L = -50W + 450.

Transferable property rights on individual decision making : Explain the influence that transferable property rights versus non-transferable property rights, has on individual decision making.

Decision analysis-maximax criterion : By using the maximax criterion, what decision should be made by the decision maker?

Explain the current success of harrah strategy : Discuss the advantages and/or disadvantages of distributing marketable pesticide permits to each farm operating in the watershed equal to 40% of its current level of use of that pesticide, versus simply ordering each farm to reduce pesticide use t..

Determine the depth d of liquid in the tank : The level of the liquid surface in the tank can be calculated. If the pressure on the gage is 20 kPa, Determine the depth d of liquid in the tank?

Concepts of minimum wage thery and monopoly market : Explain why a monopolist will never set a price (and produce the corresponding output) at which the demand is price-inelastic.

Probabilities of low-medium and high compliance : The probabilities of low, medium and high compliance are 0.3, 0.4, and 0.3, respectively

User Account

All Pages