Decision Alternative d₁ d₂ States of Nature 51 52 53 240 90 90 15 90 65 Suppose that the decision maker obtained the probabilities P(S₁) = 0.65, P(S₂) = 0.15, and P(S3) = 0.20. Use the expected value approach to determine the optimal decision. EV(d₂) = EV(d₂) = The optimal decision is

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The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature.
Decision
Alternative
=
States of Nature
51 52 53
d₁
d₂
Suppose that the decision maker obtained the probabilities P(s₁) = 0.65, P(5₂) = 0.15, and P(53) = 0.20. Use the expected value approach to determine the optimal decision.
EV(d₁)
EV(d₂) =
The optimal decision is? .
240 90
90
15
90 65
Transcribed Image Text:The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature. Decision Alternative = States of Nature 51 52 53 d₁ d₂ Suppose that the decision maker obtained the probabilities P(s₁) = 0.65, P(5₂) = 0.15, and P(53) = 0.20. Use the expected value approach to determine the optimal decision. EV(d₁) EV(d₂) = The optimal decision is? . 240 90 90 15 90 65
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