Calculating outcomes as equally likely would BEST describe:O a. Maximax criterionO b. Laplace criterionO c. Regret criterionOd. Maximin criterionDetermining the average payoff for each alternative and choosing the one with the BEST payoff is the approach called:ea, maximaxO b. minimax regretO c. laplaceOd maximinM

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Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section9.2: Elements Of Decision Analysis

Problem 2P

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3. The manager for a manufacturing company must recommend whether to construct a large plant, construct a small plant or do nothing. He estimates the long-run profits in $ as follows: State of Nature Alternative Good Average Poor Market($) Market ($) Market ($) Construct a 100,000 35,000 -60,000 large plant Construct a 75,000 25,000 -40,000 small plant Do nothing -5,000 0 0 Probability 25% 50% 25% Solve using: A. Expected Opportunity Loss B. Expected Value of Perfect Information
Explain or define each of these terms:a. Laplace criterionb. Minimax regretc. Expected valued. Expected value of perfect information
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Calculating outcomes as equally likely would BEST describe: O a Maximax criterion O b. Laplace criterion O c. Regret criterion Od. Maximin criterion