The approach used to determine the optimal decision strategy involves
A) a forward (left to right) pass through the decision tree.
B) a backward (right to left) pass through the decision tree.
C) choosing the outcome of a chance event with the greatest probability.
D) choosing the outcome of a chance event with the greatest payoff.

Question

The approach used to determine the optimal decision strategy involves​
A) ​a forward (left to right) pass through the decision tree.
B) ​a backward (right to left) pass through the decision tree.
C) ​choosing the outcome of a chance event with the greatest probability.
D) ​choosing the outcome of a chance event with the greatest payoff.

Quizplus · Accepted Answer

The optimal decision strategy involves working backwards (right to left) through the decision tree, starting from the final outcome and evaluating each possible decision along the way. By considering the payoffs and probabilities of each decision, we can determine which decision strategy will maximize our expected value. Therefore, choice B is the correct approach to determine the optimal decision strategy.

The Approach Used to Determine the Optimal Decision Strategy Involves​

The Approach Used to Determine the Optimal Decision Strategy Involves