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

Introduction to mathematics, We know that one has to deal with ...

We know that one has to deal with numbers in day-to-day life irrespective of his inclination and field of work. Also one cannot refute the fact

Determine the size of belt, On a piece of machinery, the centers of two pul...

On a piece of machinery, the centers of two pulleys are 3 feet apart, and the radius of each pulley is 6 inches. Determine the size of belt (in feet) is required to wrap around bot

Probability, an insurance salesman sells policies to 5 men, all of identica...

an insurance salesman sells policies to 5 men, all of identical age in good health. the probability that a man of this particular age will be alive 20 years hence is 2/3.Find the p

Estimate the grade resistance, The grade resistance is F=W sin θ, where θ i...

The grade resistance is F=W sin θ, where θ is the grade and W is the weight of the automobile.  What is the grade resistance of a 2500 pound car traveling on a 2.6 degree uphill gr

Formula to estimate distance around circle table, If Lisa wants to know the...

If Lisa wants to know the distance around her circular table, that has a diameter of 42 in, which formula will she use? The circumference or distance around a circle is π times

First order differential equations, In this section we will consider for so...

In this section we will consider for solving first order differential equations. The most common first order differential equation can be written as: dy/dt = f(y,t) As we wil

Elimination, Eliment t from following equations v=u+at s=ut+1/2at^2

Eliment t from following equations v=u+at s=ut+1/2at^2

Describe three ways to write negative fractions, Describe Three Ways to Wri...

Describe Three Ways to Write Negative Fractions? There are three different ways that a negative fraction can be written. They are all represent the same value. 1. The negative

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