The following payoff table provides profits based on various possible decision alternatives and various levels of demand. ALTERNATIVE DEMAND LOW MEDIUM HIGH Alternative 1 40 80 150 Alternative 2 80 120 130 Alternative 3 100 100 100 a. Which alternative should be chosen using the equally likely decision criterion? b. Set-up the opportunity loss table. c. Which alternative should be chosen using the minimax regret criterion?
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The following payoff table provides profits based on various possible decision alternatives and various levels of demand.
ALTERNATIVE |
DEMAND |
||
LOW |
MEDIUM |
HIGH |
|
Alternative 1 |
40 |
80 |
150 |
Alternative 2 |
80 |
120 |
130 |
Alternative 3 |
100 |
100 |
100 |
a. Which alternative should be chosen using the equally likely decision criterion?
b. Set-up the opportunity loss table.
c. Which alternative should be chosen using the minimax regret criterion?
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