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

Parabola, If the point (a,2a) is an interior point of the region bounded by...

If the point (a,2a) is an interior point of the region bounded by the parabola y2=16x and the double ordinate through the focus then a belongs to

integration: if f(x)+f(x+1/2) =1 find limit 0 to 2, f(x)+f(x+1/2) =1 f(x...

f(x)+f(x+1/2) =1 f(x)=1-f(x+1/2) 0∫2f(x)dx=0∫21-f(x+1/2)dx 0∫2f(x)dx=2-0∫2f(x+1/2)dx take (x+1/2)=v dx=dv 0∫2f(v)dv=2-0∫2f(v)dv 2(0∫2f(v)dv)=2 0∫2f(v)dv=1 0∫2f(x)dx=1

Properties of the indefinite integral, Properties of the Indefinite Integra...

Properties of the Indefinite Integral 1.  ∫ k f ( x ) dx = k ∫ f ( x ) dx where k refer for any number.  Thus, we can factor multiplicative constants out of indefinite integral

Polynomials, simplify the expression 3/5/64

simplify the expression 3/5/64

Gabbyu, how smart do u have to be to get into google

how smart do u have to be to get into google

What day?, together, pearl and harvey are going to visit their aunt on sund...

together, pearl and harvey are going to visit their aunt on sunday. If Pearl visits their aunt every 6 days, while harvey every 8 days, on what day will they visit their aunt toget

G .E matrix, using the g.e matrix, how can you turn an unattractive product...

using the g.e matrix, how can you turn an unattractive product to be attractive

Find out the product of 5.2 × 10^3 and 6.5 × 10^7, Find out the product of ...

Find out the product of 5.2 × 10 3 and 6.5 × 10 7 . Write your answer in scientific notation. To multiply numbers written within scienti?c notation,  multiply the ?rst numbers

What is the continuously compounded forward rate, At time t an investor s...

At time t an investor shorts a $1 face value zero coupon bond that matures at time T = t and uses the entire proceeds to purchase a zero coupon bond that matures at time

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