A concession stand manager at a baseball game must decide whether to have the souvenir vendors sell sun visors or umbrellas. There is a 30% chance of rain, a 15% chance of clouds, and a 55% chance of sunshine, according to weather predictions for the game. Because supplies can only be ordered 3 days before each game, the stand manager is unable to wait until the day before the game to acquire the materials to be sold. The manager estimates the following profits will result from each decision, given the weather conditions. Given the following table, select the best decision using the following decision criteria. • Maximin • Maximax • Maximum likelihood criterion • Bayes’ decision rule Decision Rain Cloudy Sunny Sun Visors $-500 $-200 $1,500 Umbrellas $2,000 $0 $-900 Prior Probabilities 0.30 0.15 0.55
A concession stand manager at a baseball game must decide whether to have the souvenir vendors sell sun visors or umbrellas. There is a 30% chance of rain, a 15% chance of clouds, and a 55% chance of sunshine, according to weather predictions for the game. Because supplies can only be ordered 3 days before each game, the stand manager is unable to wait
until the day before the game to acquire the materials to be sold. The manager estimates the following profits will result from each decision, given the weather conditions. Given the
following table, select the best decision using the following decision criteria.
• Maximin
• Maximax
• Maximum likelihood criterion
• Bayes’ decision rule
Decision | Rain | Cloudy | Sunny |
Sun Visors | $-500 | $-200 | $1,500 |
Umbrellas | $2,000 | $0 | $-900 |
Prior Probabilities | 0.30 | 0.15 | 0.55 |
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