Problem 13-14 (Algorithmic)
The following profit payoff table shows profit for a decisionanalysis problem with two decision alternatives and three states ofnature:
The probabilities for the states of natureare P(s1) =0.45, P(s2) =0.25 and P(s3) = 0.3.
d1d2d1 or d2
d1d2d1 or d2
d1d2d1 or d2
d1d2
Problem 13 14 Algorithmic The Following Profit Payoff Table Shows Profit For A Decision Analysis Problem With Two Deci 1 (59.57 KiB) Viewed 6 times
Problem 13-14 (Algorithmic) The following profit payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature: State of Nature Decision Alternative S₁ S2 S3 250 100 100 S1 : S2: d1 d2 S3: d1 or d2 d1 d2 200 100 150 The probabilities for the states of nature are P(S1) = 0.45, P(S2) = 0.25 and P(S3) = 0.3. a. What is the optimal decision strategy if perfect information were available? b. What is the expected value for the decision strategy developed in part (a)? If required, round your answer to one decimal place.
c. Using the expected value approach, what is the recommended decision without perfect information? d1 d2 alue? If required, round your answer to one decimal place. d. What is the expected value of perfect information? If required, round your answer to one decimal place.
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