The director of social services of a county has learned that the state has mandated additional information requirements. This will place an additional burden on the agency. The director has identified three acceptable alternatives to handle the increased workload. One alternative is to reassign present staff members, the second is to hire and train two new workers, and the third is to redesign current practice so that workers can readily collect the information with little additional effort. An unknown factor is the caseload for the coming year when the new data will be collected on a trial basis. The estimated costs for various options and caseloads are shown in the following table.

CASELOAD Moderate High Very High Reassign staff $50* 60 85 New staff 60 60 60 Redesign collection 40 50 90

*Cost in $ thousands.

45

(45)

99 40 50 30 1/3 1/3 1/3 40 50 1/2 1/2

.30

.20

.50

.30

.20

.50 60 0

90 40 44 60 1/3 1/3 1/3 Alternative A Alternative B 242 Supplement to Chapter Five Decision Theory Assuming that past experience has shown the probabilities of various caseloads to be unreliable, what decision would be appropriate using each of the following criteria?

a. Maximin

b. Maximax

c. Minimax regret

d. Laplace LO.1