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An Introduction to Management Science 13th Edition by David Anderson,Dennis Sweeney ,Thomas Williams ,Jeffrey Camm, Kipp Martin
Edition 13ISBN: 978-1439043271An Introduction to Management Science 13th Edition by David Anderson,Dennis Sweeney ,Thomas Williams ,Jeffrey Camm, Kipp Martin
Edition 13ISBN: 978-1439043271 Exercise 9
The following profit payoff table was presented in Problem 1: 
The probabilities for the states of nature are P ( s 1 ) = 0.65, P ( s 2 ) = 0.15, and P ( s 3 ) = 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?
The probabilities for the states of nature are P ( s 1 ) = 0.65, P ( s 2 ) = 0.15, and P ( s 3 ) = 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?
Explanation
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(a)Optimal decision strategy:
If perfec...
An Introduction to Management Science 13th Edition by David Anderson,Dennis Sweeney ,Thomas Williams ,Jeffrey Camm, Kipp Martin
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