Maximin method -decision making under uncertainty, Mathematics

Assignment Help:

Decision making under uncertainty

Various methods are used to make decision in circumstances whereas only the pay offs are identified and the likelihood of every state of nature are identified

a)      Maximin Method

This criterion is based upon the "conservative approach' to suppose that the worst possible is going to occur. The decision maker considers every strategy and locates the minimum pay off for each and then selects that alternative that maximizes the minimum payoff

Demonstration

Rank the products A, B and C applying the Maximin rule b using the given payoff table showing potential losses and profits which are expected to arise from launching these three products in three market situation

Pay off table in £ 000's

 

Boom condition

Steady state

Recession

Mini profits row minima

Product A

+8

1

-10

-10

Product B

-2

+6

+12

-2

Product C

+16

0

-26

-26

 

In above table

Ranking the MAXIMIN rule = BAC

 


Related Discussions:- Maximin method -decision making under uncertainty

Calculus level 2, the first question should be done using the website given...

the first question should be done using the website given (www.desmos.com/calculator )and another good example to explain using the graph ( https://www.desmos.com/calculator/ydimzr

Errors are useful in learning maths, Errors Are Useful :  While teaching c...

Errors Are Useful :  While teaching children, you must have found theft making mistakes off and on. How do you respond to the errors'? What do they tell you about the child-failur

Basic differential equation, Two 1000 liter tanks are containing salt water...

Two 1000 liter tanks are containing salt water. Tank 1 has 800 liters of water initially having 20 grams of salt dissolved in this and tank 2 has 1000 liters of water and initially

Marketing research, In pharmaceutical product research doctors visit the pl...

In pharmaceutical product research doctors visit the place to learn what

Find their present ages of son and father, When the son will be as old as t...

When the son will be as old as the father today their ages will add up to 126 years. When the father was old as the son is today, their ages add upto 38 years.  Find their present

Equilibrium solutions, In the earlier section we modeled a population depen...

In the earlier section we modeled a population depends on the assumption that the growth rate would be a constant. Though, in reality it doesn't make much sense. Obviously a popula

Marginal cost & cost function, Marginal cost & cost function  The cost ...

Marginal cost & cost function  The cost to produce an additional item is called the marginal cost and as we've illustrated in the above example the marginal cost is approxima

What decimal is represented by point a on the number line, What decimal is ...

What decimal is represented by point A on the number line? The hash marks indicate units of 0.01 between 0.75 and 0.80. Point A is 0.77. See the ?gure below.

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd