The following payoff table shows the profit for a decision problem with two states of nature and two decision alternatives.Decision AlternativeState of Nature51d₂d2(a) Use graphical sensitivity analysis to determine the range of probabilities of state of nature s, for which each of the decision alternatives has the largest expected value.d:is optimal for p(s₂) ≤ 0.2857; d. ✓ is optimal for p(s₂) > 0.28571252635(b) Suppose P(s) = 0.2 and P(5₂) = 0.8. What is the best decision using the expected value approach?The best decision is d:with an expected value of 5.2(c) Perform sensitivity analysis on the payoffs for decision alternative d₁. Assume the probabilities are as given in part (b), and find the range of payoffs under states of natures, and s₂ that will keep the solution found in part (b) optimal.As long as the payoff for s, is --?--, then d₂ will be optimal.As long as the payoff for s₂ is --?--Is the solution more sensitive to the payoff under state of nature s₁ or 5₂?0 5₁0 $₂Fthen d₂ will be optimal.

Given details:Decision AlternativeState of NatureS1S2d1123d265

Answered: The following payoff table shows the…

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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Devise a solution for the problem under each of the four criteria of decisions under uncertainty.
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