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The following table shows both prospective profits and losses for a company, depending on what decision is made and what state of nature occurs. State
The following table shows both prospective profits and losses for a company, depending on what decision is made and what state of nature occurs.
State of Nature | |||
---|---|---|---|
Decision | s1 | s2 | s3 |
d1 | 30 | 90 | 30 |
d2 | 110 | 30 | 40 |
d3 | 75 | 10 | 130 |
d4 | 15 | 15 | 15 |
Use the information to determine what the company should do. Show your work (regret table).
(a)
Show a regret table.
State of Nature | ||||
---|---|---|---|---|
Decision | s1 | s2 | s3 | Maximum Regret |
d1 | ||||
d2 | ||||
d3 | ||||
d4 |
(b)
If an optimistic strategy is used.
d1
d2
d3
d4
(c)
If a conservative strategy is used.
d1
d2
d3
d4
(d)
If minimax regret is the strategy.
d1
d2
d3
d4
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