Question: Question 3: [11 marks] Following payoff table (Table 3) shows profit for a decision Analysis problem with two decision alternatives and two states of nature.

Question 3: [11 marks] Following payoff table (Table 3) shows profit for a decision Analysis problem with two decision alternatives and two states of nature. Table 3: Decision States of Nature Alternatives S1 S2 D1 960 -490 D2 670 320 (i) Without considering the probabilities, recommend a decision based on the use of the optimistic, conservative, and minimax regret approaches. [7] (ii) Let us suppose that the probabilities of S1 is 0.7 and probability of S2 is 0.3. Use the expected value approach to find out an optimal decision. [2] (ii) Suppose that the probability of S1 is 0.8 and probability of S2 is 0.2. What is the optimal decision using the expected value approach? [2]

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