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

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

a. Construct a decision tree for this problem.
b. If the decision maker knows nothing about the probabilities of the three states of nature, what is the recommended decision using the optimistic, conservative, and mini-max regretapproaches?

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Quantitative Methods for Business

ISBN: 978-0324651751

11th Edition

Authors: David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey cam

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Question Posted: Aug 01, 2012 03:06 AM

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

Question:

State of Nature Decision Alternative di 250 100 100 100 25 75

Step by Step Answer:

a b Decision Maximum Profit Minimum Profit d 1 250 25 d 2 1...View the full answer

Quantitative Methods for Business

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