Suppose that a decision is faced with three decision alternatives and four states of nature. The following profit payoff table is constructed: ALTERNATIVES STATE OF NATURE S1 S2 S3 S4 A1 18 12 15 8 A2 15 14 10 11 A3 13 16 19 15 Assuming that the decision maker has no knowledge about the probabilities of occurrence of the four states of nature, find the decisions to be recommended under each of the following criteria: i. Maximin criterion ii. Maximax criterion iii. Minimax Reject criterion iv. Hurwicz criterion with α = 0.6

Suppose that a decision is faced with three decision alternatives and four states of nature. The following profit payoff table is constructed: ALTERNATIVES STATE OF NATURE S1 S2 S3 S4 A1 18 12 15 8 A2 15 14 10 11 A3 13 16 19 15 Assuming that the decision maker has no knowledge about the probabilities of occurrence of the four states of nature, find the decisions to be recommended under each of the following criteria: i. Maximin criterion ii. Maximax criterion iii. Minimax Reject criterion iv. Hurwicz criterion with α = 0.6

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 31P

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