Question 8 (10 points) The following payoff table that represents the profits earned for each alternative (A, B, and C) under the states of nature Good, normal and poor Alternatives States of Nature Good normal Poor $1,200 $700 ($100) $800 $300 $100 $500 $200 $50 probability 0.40 0.40 0.20 A B Refer to the payoff table. Using the maximax criterion, what would be the highest expected payoff? Refer to the payoff table. Using the minimax regret criterion, which alternative would you choose? Refer to the payoff table. Using the Laplace criterion, what would be the highest expected payoff? 1 $1.200 2 $100 Refer to the payoff table Using the criterion of realism and an alpha value of 0.8, what would be the highest expected payoff? 3 $600 4 $940 5 $200 Refer to the payoff table. Using the maximin criterion, what would be the highest expected payoft? 6 $740 7 $780 8 $40 Refer to the payoff table. What is the expected value of perfect Information (EVP2 9. A Which alternative you 10,8 2. $100 Refer to the payoff table. Using the criterion of realism and an alpha value of 0.8, what would be the highest expected payoff? 3. $600 4. $940 5. $200 Refer to the payoff table. Using the maximin criterion, what would be the highest expected payoff? 6. $740 7. $780 8. $40 Refer to the payoff table. What is the expected value of perfect information (EVP)? 9. A A 10. B Which alternative you will choose with decision making under risk? 11 C Which alternative you will choose with decision making under uncertainty? Refer to the payoff table. Using the expected monetary value (EMV criterion, what is the highest attainable expected profit? Refer to the payoff table. What is the expected value under certainty? Previous Page Next Page Page 8 of 28