Explain what is the evpi, Operation Management

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State of nature

decision

S1

S2

S3

D1

250

750

500

D2

300

-250

1200

D3

500

500

600

 

 

 

 

The above is the payoff table.

1-what choice should be made by the optimistic decision maker?

2-what choice should be made by the conservative decision maker ?

3-what choice should be made under minimax regret?

4-If the probabilities of D1 ,D2 and D3 are 0.2 ,0.5,and 0.3, respectively, then what choice should be made under expected value?

5- what is the EVPI?


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