The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, moderate, or high, as follows.

-If he uses Bayes' decision rule,which size bus will he decide to purchase?

Question

The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, moderate, or high, as follows.
 
-If he uses Bayes' decision rule,which size bus will he decide to purchase?

Quizplus · Accepted Answer

Bayes' decision rule involves choosing the option with the highest expected utility or lowest expected cost. Without specific probabilities or costs provided, the medium bus is often a balanced choice in decision-making scenarios.

The Operations Manager for a Local Bus Company Wants to Decide