Future and decision analysis under risk

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Reference no: EM132224036

Decision Analysis Under Uncertainty and Risk Consider one of the managerial decisions for any company.

a) Consider possible outcomes that might happen in the future (e.g., demand level) and different alternatives. Create the payoff table.

b) Decision Analysis Under Uncertainty: Analyze different alternatives you have assuming you have no information about the probability of each outcome. Identify the best alternative using the following decision models:

1. Maximax

2. Maximin

3. Criterion of realism

4. Equally likely

5. Minimax regret

c) Decision Analysis Under Risk: Assume a probability for each of the outcomes. Identify the best alternative using the following decision models:

1. Expected monetary value

2. Expected opportunity loss

d) Calculate the following based on the outcome probabilities in section (l) above:

1. Expected Value with Perfect Information (EVwPI)

2. Expected Value of Perfect Information (EVPI)

Reference no: EM132224036

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