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What is the recommended decision without perfect information

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Reference no: EM133093274

Question - The following profit payoff table was presented in Problem:

Decision Alternative

State of Nature

s1

s2

s3

d1

250

100

25

d2

100

100

75

The probabilities for the states of nature are P(s1) 0.65, P(s2) 0.15, and P(s3) 0.20.

a. What is the optimal decision strategy if perfect information were available?

b. What is the expected value for the decision strategy developed in part (a)?

c. Using the expected value approach, what is the recommended decision without perfect information? What is its expected value?

d. What is the expected value of perfect information?

Reference no: EM133093274

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