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0 Question 3 (10 points): The following profit payoff table was presented in Question 2. Suppose that the decision maker obtained the probability assessments P(s) = 0.45, P(s) = 0.25, and P(s) 0.30. Decision Alternative dl sl 150 200 State of Nature $2 180 160 $3 130 110 a. Use the expected value approach to determine the optimal decision. (3 points) b. What is the optimal decision strategy if perfect information were available? (2 points) c. What is the expected value for the decision strategy developed. in part (b)? (3 points) d. What is the expected value of perfect information? (2 points)
Chapter 13: Decision Analysis Question 2 (10 points): The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature: State of Nature Decision Alternative dl d2 sl 150 200 $2 180 160 $3 130 110 a. Construct a decision tree for this problem. (1 point) b. If the decision maker knows nothing about the probabilities of the three states of nature what is the recommended decision using the optimistic approach? (2.5 points) C. If the decision maker knows nothing about the probabilities of the three states of nature what is the recommended decision using the conservative approach? (2.5 points) d. If the decision maker knows nothing about the probabilities of the three states of nature what is the recommended decision using the minimax regret approach? (4 points)