Question: The following profit payoff table was presented in Problem 1: The probabilities for the states of nature are P(s1) = 0.65, P(s2) = 0.15, and

The following profit payoff table was presented in Problem 1:

The probabilities for the states of nature are P(s1) = 0.65, P(s2) = 0.15, and P(s3) = 0.20.
a. What is the optimal decision strategy if perfect information were available?
b. What is the expected value for the decision strategy developed in part a?
c. Using the expected value approach, what is the recommended decision without perfect information? What is its expected value?
d. What is the expected value of perfect information?

State of Nature Decision Alternative di d2 250 100 100 100 25 75

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