A decision maker has prepared the following payoff table. States of Nature Alternative High Low Buy 85 Rent 70 50 Lease 45 55 Prior Probability 0.7 0.3 Using Baye's Decision Rule, what is the best decision and the expected payoff? (Round your answer to 1 decimal place.) Best decision Payoff
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- DAAPS A decision maker has prepared the following payoff table. 1 States of Nature Alternative High Low Buy 80 10 Rent 60 45 Lease 50 40 Using the Maximin criterion, what is the best decision and the expected payoff? Best decision PayoffA decision maker has prepared the following payoff table. States of Nature Alternative High Low Buy 75 -10 Rent 70 30 Lease 50 35 Prior Probability 0.5 0.5 Using Baye's Decision Rule, what is the best decision and the expected payoff? (Round your answer to 1 decimal place.) Best decision РayofExhibit 20-2Below is a payoff table involving three states of nature and two decision alternatives. Decision States of Nature Alternative s1 s2 s3 A 80 45 –20 B 40 50 15 P(s1) = .1, P(s2) = .6, and P(s3) = .3.Refer to Exhibit 20-2. The expected value of the best alternative equals _____. a. 12 b. 38.5 c. 29 d. 105
- A. A company wants to produce a souvenir with a marketing life of six months. Uncertainty surrounds the likely sales volume as well as the fixed costs of the venture as shown below: Sales units Probability Contrn. /unit Probability Fixed cost K7 K5 100 000 0.3 80 000 0.6 60 000 0.1 1.0 0.5 0.5 1.0 Determine the expected value of the contribution K400 000 K450 000 K500 000 Probability 0.2 0.5 0.3 1.0Answer A.2 a-e a-c is in the picture here is d and e d) What is the qually likely decision? e) Develop a decision tree. Assume each outcome is equally likely, then find the highest EMV.A decision maker has prepared the following payoff table. States of Nature Alternative High Low Buy 95 10 Rent 65 35 Lease 45 50 Prior Probability 0.8 0.2 Using Baye's Decision Rule, what is the best decision and the expected payoff? (Round your answer to 1 decimal place.) Best decision Payoff Prev 1 of 5 Next >
- A decision maker has prepared the following payoff table. States of Nature Alternative High Low Buy 90 10 Rent 60 35 Lease 50 40 Using the Maximax criterion, what is the best decision and the expected payoff? Best decision Payoff 3 of 5A company wants to produce a souvenir with a marketing life of sixmonths. Uncertainty surrounds the likely sales volume as well as thefixed costs of the venture as shown below:Sales units Probability Contrn. /unit Probability Fixed cost Probability100 000 0.3 K 7 0.5 K400 000 0.2 Page 5 of 80 000 0.6 K 5 0.5 K450 000 0.560 000 0.1 K500 000 0.31.0 1.0 1.0 Determine the expected value of the contributionA decision maker has prepared the following payoff table. States of Nature Alternative High Low 100 Buy Rent 80 45 Lease 50 40 Using the Maximin criterion, what is the best decision and the expected payoff? Best decision Payoff
- The following payoff table shows the profit for a decision problem with two states of nature and two decision alternatives. Decision Alternative State of Nature $1 d₁ d₂ (a) Suppose P(s₁) = 0.2 and P(5₂) = 0.8. What is the best decision using the expected value approach? The best decision is --?-- with an expected value of 12 $₂ 6 3 5 (b) Perform sensitivity analysis on the payoffs for decision alternative d₂. Assume the probabilities are as given in part (a), and find the range of payoffs under states of natures, and so that will keep the solution found in part (a) optimal. As long as the payoff for s₁ under d₁ is --?-- , then the solution found in part (a) will be optimal. then the solution found in part (a) will be optimal. As long as the payoff for s₂ under d₁ is --?-- Is the solution more sensitive to the payoff under state of nature s₁ or 5₂? O $₁ 0 5₂Supposed that a decision-maker faced with four decision alternatives and four states of nature develops the following profit payoff table.1. If the decision-maker knows nothing about the probabilities of the four states of nature, what is the recommended decision using the MAXIMAX criterion?2. What decision alternative will he choose if using the MAXIMIN criterion?3. What about MINIMAX REGRET CRITERION?4. What decision would he make if using the criterion of realism at alpha 0.6 is used?A decision maker has prepared the following payoff table. States of Nature Alternative High Low Buy 100 Rent 60 35 Lease 60 45 Using the Maximax criterion, what is the best decision and the expected payoff? Best decision Payoff