Consider the accompanying payoff table. Complete parts a through e below.

Demand Level

Alternative

$1$

$2$

$3$

A

$ $500$

$ $800$

$ $1$ comma $100$

B

$ $200$

$ $900$

$ $1$ comma $700$

C

negative $ $600$

$ $700$

$ $2$ comma $400$

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Part $1$

a$.$ Choose the best alternative using the maximax criterion.

Alternative

C

is the best alternative based on the maximax criterion because its

maximum

payoff is the

highest

of all the actions.

Part $2$

b$.$ Choose the best alternative using the maximin criterion.

Alternative

A

is the best alternative based on the maximin criterion because its

minimum

payoff is the

highest

of all the actions.

Part $3$

c$.$ Choose the best alternative using the equally likely criterion.

Alternative

B

is the best alternative based on the equally likely criterion because its

average

payoff is the

highest

of all the actions.

Part $4$

d$.$ Choose the best alternative using the minimax regret criterion.

Alternative

B

is the best alternative based on the minimax regret criterion because its

maximum

regret is the

lowest

of all the actions.

Part $5$

e$.$ Choose the best alternative using the Hurwicz criterion with alphaequals$0\mathrm{.}7.$

Alternative

C

is the best alternative based on this Hurwicz criterion because its weighted$$ average, $$$

$$

$1500,$ is the

lowest

of all the actions.

Alternativeis the best alternative based on the maximax criterion because itsis the best alternative based on the maximax criterion because itspayoff is thepayoff is theof all the actions.Alternativeis the best alternative based on the maximin criterion because itsis the best alternative based on the maximin criterion because itspayoff is thepayoff is theof all the actions.Alternativeis the best alternative based on the equally likely criterion because itsis the best alternative based on the equally likely criterion because itspayoff is thepayoff is theof all the actions.Alternativeis the best alternative based on the minimax regret criterion because itsis the best alternative based on the minimax regret criterion because itsregret is theregret is theof all the actions.Alternativeis the best alternative based on this Hurwicz criterion because its weighted average, $is the best alternative based on this Hurwicz criterion because its weighted average, $$,$ is the, is theof all the actions.Alternativeis the best alternative based on the maximax criterion because itsis the best alternative based on the maximax criterion because itspayoff is thepayoff is theof all the actions.Alternativeis the best alternative based on the maximin criterion because itsis the best alternative based on the maximin criterion because itspayoff is thepayoff is theof all the actions.Alternativeis the best alternative based on the equally likely criterion because itsis the best alternative based on the equally likely criterion because itspayoff is thepayoff is theof all the actions.Alternativeis the best alternative based on the minimax regret criterion because itsis the best alternative based on the minimax regret criterion because itsregret is theregret is theof all the actions.Alternativeis the best alternative based on this Hurwicz criterion because its weighted average, $is the best alternative based on this Hurwicz criterion because its weighted average, $$,$ is the, is theof all the actions.

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