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The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature: State of Nature Decision Alternative S1 S2 S3 d1 250 100 25 d2 100 100 75

The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature: State of Nature Decision Alternative S1 S2 S3 d1 250 100 25 d2 100 100 75

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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(b) If the decision maker knows nothing about the probabilities of the three states of nature, what is the recommended decision using the optimistic, conservative, and minimax regret approaches? Optimistic approach d1 Conservative approach d2 Minimax regret approach d1
Transcribed Image Text:(b) If the decision maker knows nothing about the probabilities of the three states of nature, what is the recommended decision using the optimistic, conservative, and minimax regret approaches? Optimistic approach d1 Conservative approach d2 Minimax regret approach d1
The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature: State of Nature Decision Alternative S1 S2 S3 d1 250 100 25 d2 100 100 75 (a) Choose the correct decision tree for this problem. (i) (ii) 250 250 $2 2 2 100 100 25 1 100 100 1 3 3 100 dz 100 75 25 4 dz 75 (iv) (iii) 250 250 2 2 100 100 100 1 3 100 dz 25 25 3 75 75 Model (ii)
Transcribed Image Text:The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature: State of Nature Decision Alternative S1 S2 S3 d1 250 100 25 d2 100 100 75 (a) Choose the correct decision tree for this problem. (i) (ii) 250 250 $2 2 2 100 100 25 1 100 100 1 3 3 100 dz 100 75 25 4 dz 75 (iv) (iii) 250 250 2 2 100 100 100 1 3 100 dz 25 25 3 75 75 Model (ii)
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