Dwight Moody is the manager of a large farm with 1,000 acres of arable land. For greater
Question:
After referring to historical meteorological records, Dwight also estimated the following prior probabilities for the weather during the growing season:
Dry............ 0.3
Moderate ........ 0.5
Damp........... 0.2
(a) Develop a decision analysis formulation of this problem by identifying the decision alternatives, the states of nature, and the payoff table.
(b) Use Bayes decision rule to determine which crop to grow.
(c) Using Bayes decision rule, do sensitivity analysis with respect to the prior probabilities of moderate weather and damp weather (without changing the prior probability of dry weather) by re-solving when the prior probability of moderate weather is 0.2, 0.3, 0.4, and 0.6.
Step by Step Answer:
Introduction to Operations Research
ISBN: 978-1259162985
10th edition
Authors: Frederick S. Hillier, Gerald J. Lieberman