Determine the best decision, using the following decision criteria Maximax Maximin LaPlace
QUESTION A
The Miramar Company is going to introduce one of three new products: a widget, a hummer, or a nimnot. The market conditions (favorable, stable, or unfavorable) will determine the profit or loss the company realizes, as shown in the following payoff table:
State of Nature
Favourable Stable Unfavourable
Product 0.2 0.7 0.1
Widget $ 120,000 $ 70,000 $ –30,000
Hummer 60,000 40,000 20,000
Nimnot 35,000 30,000 30,000
- Determine the best decision, using the following decision criteria
- Maximax
- Maximin
LaPlace
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