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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)

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
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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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)

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
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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