Use the table below to answer the questions that follow and caculate the Expected Monetary Value (EMV) of the different outcomes DECISION TABLE WITH CONDITIONAL VALUES STATE OF NATURE FAVORABLE OUTCOME UNFAVORABLE OUTCOME ALTERNATIVES ($) ($) Start a big Company 2,000,000 -500,000 Start a small company 800,000 -200,000 Build Nothing 0 0 Probabilities 0.3 0.7 Calculate the following The EMV Maximin criterion Maximax criterion Minimax criterion
Use the table below to answer the questions that follow and caculate the Expected Monetary Value (EMV) of the different outcomes DECISION TABLE WITH CONDITIONAL VALUES STATE OF NATURE FAVORABLE OUTCOME UNFAVORABLE OUTCOME ALTERNATIVES ($) ($) Start a big Company 2,000,000 -500,000 Start a small company 800,000 -200,000 Build Nothing 0 0 Probabilities 0.3 0.7 Calculate the following The EMV Maximin criterion Maximax criterion Minimax criterion
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter9: Decision Making Under Uncertainty
Section9.2: Elements Of Decision Analysis
Problem 3P
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Question
Use the table below to answer the questions that follow and caculate the Expected Monetary Value
(EMV) of the different outcomes
DECISION TABLE WITH CONDITIONAL VALUES
STATE OF NATURE
FAVORABLE OUTCOME UNFAVORABLE OUTCOME
ALTERNATIVES ($) ($)
Start a big Company 2,000,000 -500,000
Start a small company 800,000 -200,000
Build Nothing 0 0
Probabilities 0.3 0.7
Calculate the following
The EMV
Maximin criterion
Maximax criterion
Minimax criterion
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