TABLE 17-6
A student wanted to find out the optimal strategy to study for a Business Statistics exam. He constructed the following payoff table based on the average amount of time he needed to put in every week studying for the course and the degree of difficulty of the exam. From the information that he gathered from students who had taken the course, he concluded that there was a 40% probability that the exam would be easy.
$$\begin{array} { | l | c | c | c | }
\hline & \text { 16 hours } & 8 \text { hours } & \text { 4 hours } \
\hline \text { Easy Exam } & 40 & 60 & 80 \
\hline \text { Difficult Exam } & 100 & 50 & 0 \
\hline
\end{array}$$
-Referring to Table 17-6, the optimal strategy using the maximin criterion is to study 8 hours per week on average for the exam.

Question

TABLE 17-6
 A student wanted to find out the optimal strategy to study for a Business Statistics exam. He constructed the following payoff table based on the average amount of time he needed to put in every week studying for the course and the degree of difficulty of the exam. From the information that he gathered from students who had taken the course, he concluded that there was a 40% probability that the exam would be easy.
 $$\begin{array} { | l | c | c | c | } 
\hline & \text { 16 hours } & 8 \text { hours } & \text { 4 hours } \
\hline \text { Easy Exam } & 40 & 60 & 80 \
\hline \text { Difficult Exam } & 100 & 50 & 0 \
\hline
\end{array}$$
-Referring to Table 17-6, the optimal strategy using the maximin criterion is to study 8 hours per week on average for the exam.

Quizplus · Accepted Answer

The maximin criterion is a decision-making strategy that seeks to minimize the maximum possible loss. In this case, the maximum possible loss is 100, which occurs if the exam is difficult and the student studies for only 4 hours. By studying for 8 hours, the student can reduce the maximum possible loss to 50.

TABLE 17-6 a Student Wanted to Find Out the Optimal

TABLE 17-6
a Student Wanted to Find Out the Optimal