2. A decision maker faced with four decision alternatives and four states of nature develops the following profit payoff table.

States of Nature Decision Alternative s1 s2 s3 s4 d1 14 9 10 5 d2 11 10 8 7 d3 9 10 10 11 d4 8 10 11 13 The decision maker obtains information that enables the following probabilities assessments: P(s1) = .5, P(s2) = .2, P(s3) = .2, and P(s1) = .1.

a. Use the expected value approach to determine the optimal solution.

b. Now assume that the entries in the payoff table are costs. Use the expected value approach to determine the optimal decision.