A farmer must decide which crop to plant next year on his land: corn, pumpkins,

Question

A farmer must decide which crop to plant next year on his land: corn, pumpkins, or beans. The return of each crop is determined by whether a new trade Bill passes. 25. What is your answer for maximax? Crop Corn Pumpkins Pass 50,000 25,000 35,000 4,000 20,000 17,000 Beans ANSWER: (Corn, Pumpkins, Beans) $ 26. What is your answer for n? Crop Pass Corn 50,000 25,000 35,000 Corn, Pumpkins, Beans) s 4,000 20,000 17,000 Pumpkins Beans ANSWER 27. What is your answer for minimax regret? Crop Corn Pumpkins Fail 4,000 20,000 17,000 Pass 50,000 25,000 35,000 Beans REGRET TABLE Crop Corn Pumpkins Pass Fail Beans ANSWER Corn, Pumpkins, Beans) S

Explanation / Answer

25.

Maximax strategy will choose the crop for which maximum possible return is highest.

Maximax strategy: Corn (Maximax return: $50,000)

26.

Maximin strategy will choose the crop for which minimum possible return is highest.

Maximin Strategy: Pumpkins (Maximin return: $20,000)

27.

Regret : The amount/opportunity lost due to a bad decision. That is, for every cell, the regret value is calculated as the difference between the maximum of that column (either pass or fail) and the value of the cell.

Regret table:-

Minimax regret will choose a crop for which maximum regret is lowest among the three.

Minimax regret strategy: Beans (minimax regret: $15,000)

Crop Pass Fail Max(pass, fail) Corn 50,000 4,000 50,000 Pumpkins 25,000 20,000 25,000 Beans 35,000 17,000 35,000

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