A decision maker has prepared the following payoff table. States of Nature Alternative High Low Buy 100 Rent 60 35 Lease 60 45 Using the Maximax criterion, what is the best decision and the expected payoff? Best decision Payoff
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- DAAPS A decision maker has prepared the following payoff table. 1 States of Nature Alternative High Low Buy 80 10 Rent 60 45 Lease 50 40 Using the Maximin criterion, what is the best decision and the expected payoff? Best decision PayoffA decision maker has prepared the following payoff table. States of Nature Alternative High Low 100 Buy Rent 80 45 Lease 50 40 Using the Maximin criterion, what is the best decision and the expected payoff? Best decision PayoffA decision maker has prepared the following payoff table. States of Nature Alternative High Low Buy 90 10 Rent 60 35 Lease 50 40 Using the Maximax criterion, what is the best decision and the expected payoff? Best decision Payoff 3 of 5
- Exhibit 20-2Below is a payoff table involving three states of nature and two decision alternatives. Decision States of Nature Alternative s1 s2 s3 A 80 45 –20 B 40 50 15 P(s1) = .1, P(s2) = .6, and P(s3) = .3.Refer to Exhibit 20-2. The expected value of the best alternative equals _____. a. 12 b. 38.5 c. 29 d. 105A decision maker has prepared the following payoff table. States of Nature Alternative High Low Buy 75 -10 Rent 70 30 Lease 50 35 Prior Probability 0.5 0.5 Using Baye's Decision Rule, what is the best decision and the expected payoff? (Round your answer to 1 decimal place.) Best decision РayofThe following payoff table shows the profit for a decision problem with two states of nature and two decision alternatives. Decision Alternative State of Nature $1 d₁ d₂ (a) Suppose P(s₁) = 0.2 and P(5₂) = 0.8. What is the best decision using the expected value approach? The best decision is --?-- with an expected value of 12 $₂ 6 3 5 (b) Perform sensitivity analysis on the payoffs for decision alternative d₂. Assume the probabilities are as given in part (a), and find the range of payoffs under states of natures, and so that will keep the solution found in part (a) optimal. As long as the payoff for s₁ under d₁ is --?-- , then the solution found in part (a) will be optimal. then the solution found in part (a) will be optimal. As long as the payoff for s₂ under d₁ is --?-- Is the solution more sensitive to the payoff under state of nature s₁ or 5₂? O $₁ 0 5₂
- A payoff table is given as: S1 S2 S3 D1 250 750 500 D2 300 -250 1200 D3 500 500 600 (a) What choice should be made by the optimistic decision maker? (b) What choice should be made by the conservative decision maker? (c) What decision should be made under minimal regret? (d) If the probabilities of d1, d2, and d3 are .2, .5, and .3, respectively, then what choice should be made under expected value?Help A decision maker has prepared the following payoff table. States of Nature Alternative High Low Buy 85 Rent 70 50 Lease 45 55 Prior Probability 0.7 0.3 Using Baye's Decision Rule, what is the best decision and the expected payoff? (Round your answer to 1 decimal place.) Best decision Payoff 4-Consider the following payoff (cost) table with probabilities for each state of nature (s) Decisions D1 D2 0.1 s1 3 state of nature 1-0.1 s2 17 20 The expected value for the best (optimal) decision is
- A decision maker has prepared the following payoff table. States of Nature Alternative High Low Buy 95 10 Rent 65 35 Lease 45 50 Prior Probability 0.8 0.2 Using Baye's Decision Rule, what is the best decision and the expected payoff? (Round your answer to 1 decimal place.) Best decision Payoff Prev 1 of 5 Next >DECISION THEORY. A man has to decide wheter to resign or not from his present position and apply for a job offering him 2x his present salary, that is if he passes the qualifying test. At present, he receives $3000 monthly compensation. The offer from another company has a condition that he will not be allowed to take the qualifying test, he will immediately be taken in and have a monthly pay of $6000. If he fails, he will remain jobless, he feels that his chance of passing the test is 35%. Suppose he decides to base his decision on expected value, should he resign from his post or not?The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature. Decision Alternative If S1 d₁ d₂ States of Nature then ? $1 240 90 90 15 The probabilities for the states of nature are P(S₁) = 0.65, P(s₂) = 0.15, and P(s3) = 0.20. (a) What is the optimal decision strategy if perfect information were available? ; If S₂ then ? 90 65 ; If S3 then ? (b) What is the expected value for the decision strategy developed in part (a)? î (c) Using the expected value approach, what is the recommended decision without perfect information? What is its expected value? The recommended decision without perfect information is ? EV = (d) What is the expected value of perfect information? EVPI = î