Suppose that a decision maker faced with three decision alternatives(d1,d2and d3),and three states of nature(s1, s2and s3)develops the following profit payoff table:

State of Nature

Decision Alternatives s1 s2 s3

d1 455 315 254

d2 300 350 350

d3 285 542 651

If nothing is known about the probabilities of the two states of nature, what is there commended decision using:

a.Optimistic approach

b.Conservative approach

c.minimax regret approach

For Question 1, suppose that the decision maker believes that the probability of state of nature s1is 0.35, the probability of state of nature s2is 0.45and the probability of state of nature s3is 0.2. Complete the following:

a. Draw a decision Tree.

b. Use the expected value approach to determine an optimal decision.