The following table is a payoff matrix associated with a farmer’s decision to purchase a pump for irrigation or to depend on the rains d) Draw up a regrets table and use it to determine which alternative will be chosen under the minimax regret decision criterion. (e) Estimate the expected value of perfect information (EVPI)
The following table is a payoff matrix associated with a farmer’s decision to purchase a pump for irrigation or to depend on the rains d) Draw up a regrets table and use it to determine which alternative will be chosen under the minimax regret decision criterion. (e) Estimate the expected value of perfect information (EVPI)
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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The following table is a payoff matrix associated with a farmer’s decision to purchase a pump for irrigation or to depend on the rains
d) Draw up a regrets table and use it to determine which alternative will be
chosen under the minimax regret decision criterion.
(e) Estimate the expected value of perfect information (EVPI)
Transcribed Image Text:The following table is a payoff matrix associated with a farmer's decision to purchase a pump for
irrigation or to depend on the rains.
Future Crop Demand
State of Nature
High
Medium
Low
Decision
0.30
0.45
0.25
Alternative/Prob.
Do not Irrigate
¢9m
¢5m
¢3m
1.5hp Pump
¢11m
¢6m
-¢4m
3.0hp Pump
¢16m
¢8m
-¢6m
5.0hp Pump
¢18m
¢12m
-¢7m
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