Question: This assignment must be in Excel/QM The following payoff table provides profits based on various possible decision alternatives and various levels of demand. States of

This assignment must be in Excel/QM

The following payoff table provides profits based on various possible decision alternatives and various levels of demand.

States of Nature

Demand

Alternatives

Low

Medium

High

Alternative 1

75

120

140

Alternative 2

90

90

90

Alternative 3

50

70

120

The probability of a low demand is 0.4, while the probability of a medium demand is 0.4 and high demand is 0.2.

(a) What decision would an optimist make?

(b) What decision would a pessimist make?

(c) What is the highest possible expected monetary value?

(d) Calculate the expected value of perfect information for this situation.

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