PAY OFF TABLE New Bridge No New Built Bridge Alternative Capacity A 1 14 for New Store B 2 10 4 6 10 1 where Sesmall B medium, Ca large 31. Assume the payoffs represent peofits. Determine the alternative that would be chosen under each of these decision criteria: a. Maximin b. Maximax c. Laplace 2. Using the information in the pay off table, develop a table of regrets, and then Determine the alternative that would be chosen under minimax regret. Tb. Deternlige the expected value of perfect information using the regret table, assuming that the probability of anew bridge being built is .60

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter9: Decision Making Under Uncertainty
Section: Chapter Questions
Problem 46P
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2
PAY OFF TABLE
3
4
New Bridge
No New
5
Built
Bridge
6
7
Alternative Capacity A
8.
14
for New Store
9.
B
2
10
10
11 where S=small B= medium, C= large
12
13 1. Assume the payoffs represent peofits. Determine the alternative that would be chosen under each of these decision criteria:
14
15
а. Маximin
16 |b. Маximаx
17
c. Laplace
18
19 2. Using the information in the pay off table, develop a table of regrets, and then
20,
Determine the alternative that would be chosen under minimax regret.
21
[b. Determline the expected value of perfect information using the regret table, assuming that the probability of anew bridge being built is .60
22
23
24
25
26
27
Transcribed Image Text:2 PAY OFF TABLE 3 4 New Bridge No New 5 Built Bridge 6 7 Alternative Capacity A 8. 14 for New Store 9. B 2 10 10 11 where S=small B= medium, C= large 12 13 1. Assume the payoffs represent peofits. Determine the alternative that would be chosen under each of these decision criteria: 14 15 а. Маximin 16 |b. Маximаx 17 c. Laplace 18 19 2. Using the information in the pay off table, develop a table of regrets, and then 20, Determine the alternative that would be chosen under minimax regret. 21 [b. Determline the expected value of perfect information using the regret table, assuming that the probability of anew bridge being built is .60 22 23 24 25 26 27
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