In the Decision Theory Assignment, you will create three different word problem scenarios and solve for each. Please do not reuse the word problems.

A suggestion would be to use the class PowerPoint slides as a reference.

Details:

1) One question will be to choose the best decision using the Pessimistic Approach. Remember Pessimistic can also be referred to as "Cautious," "Conservative," or "Maxi-Min" approach. Please create an example with 3 decision alternatives and 3 states of nature. Please write 1-2 sentences explaining how you solved the question.

2) One question will be to choose the best decision using the Mini Max Regret Approach. Please create an example with 4 decision alternatives and 3 states of nature. Please write 1-2 sentences explaining what the answer means. Example: "'Decision B' is the best decision because....."

3) One question will be to choose the best decision using the "Expected Value Approach." Please create an example with 3 decision alternatives and 3 states of nature. Also, calculate the following three items and show all work in Excel:

Expected Value with Perfect Information (EV w/ PI) Expected Value without Perfect Information (EV w/o PI) Expected Value of Perfect Information (EV of PI)

As a reminder, this is an individual project (not a group project). Also, this is your original work. It should not be word problems or questions that can be found online or from any other source.

Please email me an Excel spreadsheet containing your 3 word problem scenarios, the payout table for each, and indicate which is the best decision for each question. You will want to show all calculations in your Excel sheet.