The department of social services is considering three vocational programs to train people with disabilities: a contract for teaching the unskilled labor skills, provided by a private vendor (program A); a proposal to train people with disabilities as computer operators, provided by the state data processing center (program B); and a program to teach clerical skills, provided by a local business school (program C). Three states of nature affect the success of each program. State A is a pool of people with disabilities in which less than 20% are severely disabled; state B is 20% to 40% severely disabled; and state C is more than 40% severely disabled. The accompanying payoff table shows the number of people with disabilities who could be successfully rehabilitated in a year with the three programs and the three states of nature.

(a) Using the maximin criterion, what program would you select and why?

(b) Using the maximax criterion, what program would you select and why?

(c) Is maximin or maximax the more appropriate criterion in this case?

Transcribed Image Text:

Program A B с State of Nature А A 20 40 30 B C 70 35 10 30 35 100