Problem 13-14 (Algorithmic)

The following profit payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature:

	State of Nature
Decision Alternative	S1	S2	S3
d1	250	100	100
d2	200	100	150

The probabilities for the states of nature are P(s₁) = 0.45, P(s₂) = 0.25 and P(s₃) = 0.3.

1. What is the optimal decision strategy if perfect information were available?

   S1	: d1d2d1 or d2
   S2	: d1d2d1 or d2
   S3	: d1d2d1 or d2

2. What is the expected value for the decision strategy developed in part (a)? If required, round your answer to one decimal place. fill in the blank 4
3. Using the expected value approach, what is the recommended decision without perfect information?

   d1d2

   What is its expected value? If required, round your answer to one decimal place. fill in the blank 6
4. What is the expected value of perfect information? If required, round your answer to one decimal place. fill in the blank 7

Problem 13-14 (Algorithmic) The following profit payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature: State of Nature Decision Alternative S S2 S3 250 100 100 S1 : S2: d1 d2 S3: d1 or d2 d1 d2 200 100 150 The probabilities for the states of nature are P(S1) = 0.45, P(S2) = 0.25 and P(S3) = 0.3. a. What is the optimal decision strategy if perfect information were available? b. What is the expected value for the decision strategy developed in part (a)? If required, round your answer to one decimal place. c. Using the expected value approach, what is the recommended decision without perfect information? d1 d2 alue? If required, round your answer to one decimal place. d. What is the expected value of perfect information? If required, round your answer to one decimal place