Reference - 12.1: Use the payoff table given below for a maximization problem to answer questions 18-19.

-Reference - 12.1: Which is the recommended decision alternative using the conservative approach?
A) D1
B) D5
C) D2
D) D3

Question

Reference - 12.1: Use the payoff table given below for a maximization problem to answer questions 18-19.
 
-Reference - 12.1: Which is the recommended decision alternative using the conservative approach?
A) D1 
B) D5 
C) D2 
D) D3

Quizplus · Accepted Answer

The conservative approach evaluates each decision alternative in terms of the worst payoff that can occur. The decision alternative recommended is the one that provides the best of the worst possible payoffs. For this maximization problem, the conservative approach recommends decision alternative D1 that maximizes the minimum payoff.