A decision-maker using the maximax criterion on the problem below would choose Alternative __________ because the maximum of the row maximums is __________. $$ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~{ \text { States of Nature } } \
\begin{array} { | l | c | c | c | }
\hline & 1 & 2 & 3 \
\hline \text { Alternative A } & 50 & 55 & 60 \
\hline \text { Alternative B } & 30 & 50 & 80 \
\hline \text { Alternative C } & 70 & 80 & 70 \
\hline \text { Alternative D } & - 100 & - 10 & 140 \
\hline
\end{array}$$
A) A; 60
B) B; 80
C) C; 70
D) D; -100
E) D; 140

Question

A decision-maker using the maximax criterion on the problem below would choose Alternative __________ because the maximum of the row maximums is __________. $$ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~{ \text { States of Nature } } \
\begin{array} { | l | c | c | c | } 
\hline & 1 & 2 & 3 \
\hline \text { Alternative A } & 50 & 55 & 60 \
\hline \text { Alternative B } & 30 & 50 & 80 \
\hline \text { Alternative C } & 70 & 80 & 70 \
\hline \text { Alternative D } & - 100 & - 10 & 140 \
\hline
\end{array}$$
A) A; 60
B) B; 80
C) C; 70
D) D; -100
E) D; 140

Quizplus · Accepted Answer

The maximax criterion involves choosing the alternative with the highest possible payoff. For each alternative, the maximum payoff is: A: 60, B: 80, C: 80, D: 140. Alternative D has the highest maximum payoff of 140.

A Decision-Maker Using the Maximax Criterion on the Problem Below