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Robert Ragsdale is trying to decide if he should purchase repair and replacement insurance on a new laptop computer that he is planning to purchase. The policy costs $400.00 at the time of purchase, and over the next three years will replace the laptop if it is stolen or repair it if it is broken. The following table contains the total costs of this decision.  Which alternative is best, according to each of the following decision criteria? Maximin Maximax Laplace Minimax regret

Robert Ragsdale is trying to decide if he should purchase repair and replacement insurance on a new laptop computer that he is planning to purchase. The policy costs $400.00 at the time of purchase, and over the next three years will replace the laptop if it is stolen or repair it if it is broken. The following table contains the total costs of this decision.  Which alternative is best, according to each of the following decision criteria? Maximin Maximax Laplace Minimax regret

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Robert Ragsdale is trying to decide if he should purchase repair and replacement insurance on a new laptop computer that he is planning to purchase. The policy costs $400.00 at the time of purchase, and over the next three years will replace the laptop if it is stolen or repair it if it is broken. The following table contains the total costs of this decision. 

Which alternative is best, according to each of the following

decision criteria?

  1. Maximin
  2. Maximax
  3. Laplace
  4. Minimax regret
Alternative Buy the Insurance Do Not Buy the Insurance Computer Computer Is Stolen Breaks $2,900.00 $3,100.00 $2,900.00 $5,000.00 Computer Neither Breaks Nor Is Stolen $2,900.00 $2,500.00
Transcribed Image Text:Alternative Buy the Insurance Do Not Buy the Insurance Computer Computer Is Stolen Breaks $2,900.00 $3,100.00 $2,900.00 $5,000.00 Computer Neither Breaks Nor Is Stolen $2,900.00 $2,500.00
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