P(10,000) = 0.10 P(15,000) = 0.20 P(20,000) = 0.40 P(25,000) = 0.20 P(30,000) =
ID: 464404 • Letter: P
Question
P(10,000) = 0.10
P(15,000) = 0.20
P(20,000) = 0.40
P(25,000) = 0.20
P(30,000) = 0.10
Dealer
10,000 mi/yr
15,000 mi/yr
20,000 mi/yr
25,000 mi/yr
30,000 mi/yr
Andy
–$33,000.00
–$40,500.00
–$50,250.00
–$60,000.00
–$69,750.00
Bob
–$35,700.00
–$45,450.00
–$55,200.00
–$67,200.00
–$79,200.00
Charlie
–$31,800.00
–$41,550.00
–$51,300.00
–$61,050.00
–$70,800.00
Which dealer should be used according to the MAXIMAX decision rule?
Which dealer should be used according to the MAXIMIN decision rule?
Which dealer should be used to maximize the EMV if there is an equally-likely criteria?
Which dealer should be used to maximize the EMV using the probabilities shown in the table?
Use the values in the payoff table to construct a regret table.
Hint #3: In a regret table; all regrets are positive.
Regret Table
P(10,000) = 0.10
P(15,000) = 0.20
P(20,000) = 0.40
P(25,000) = 0.20
P(30,000) = 0.10
Dealer
10,000 mi/yr
15,000 mi/yr
20,000 mi/yr
25,000 mi/yr
30,000 mi/yr
Andy
Bob
Charlie
Which dealer should be used according to the MINIMAX REGRET decision rule?
Which dealer should be used to minimize the EOL if there is an equally-likely criteria?
Which dealer should be used to minimize the EOL using the probabilities shown in the table?
Please show how you got each answer, i'm confused at how you go about filling in the payoff table the most
P(10,000) = 0.10
P(15,000) = 0.20
P(20,000) = 0.40
P(25,000) = 0.20
P(30,000) = 0.10
Dealer
10,000 mi/yr
15,000 mi/yr
20,000 mi/yr
25,000 mi/yr
30,000 mi/yr
Andy
–$33,000.00
–$40,500.00
–$50,250.00
–$60,000.00
–$69,750.00
Bob
–$35,700.00
–$45,450.00
–$55,200.00
–$67,200.00
–$79,200.00
Charlie
–$31,800.00
–$41,550.00
–$51,300.00
–$61,050.00
–$70,800.00
Explanation / Answer
Which dealer should be used according to the MAXIMAX decision rule?
Determine the maximum value of each decision (row) and list that in a separate column. and then select the maximum value out of that column.
Charlie
EMV = -31800
Which dealer should be used according to the MAXIMIN decision rule?
Determine the minimum value of each decision (row) and list that in a separate column. and then select the maximum value out of that column.
Andy
EMV = -69750
Which dealer should be used to maximize the EMV if there is an equally-likely criteria?
Determine the average value of each decision (row) and list that in a separate column. and then select the maximum value out of that column.
Andy
EMV = -50700
Which dealer should be used to maximize the EMV using the probabilities shown in the table?
Determine the Expected value multiplying the payoff with corresponding probability of each decision (row) and list that in a separate column. and then select the maximum value out of that column. (payoff table is given below)
Andy
EMV = -50475
Which dealer should be used according to the MINIMAX REGRET decision rule?
Refer Minimax Regret Table below. Value of cell is calculated by subtrating the value of the cell from the maximum value of the particular state (column) . Maximum regret value of each decision is listed in a separate column (Max of Row) then the decision associated with minimum value of this row is selected to minimise the regret.
Andy
EMV = 1200
Which dealer should be used to minimize the EOL if there is an equally-likely criteria?
EOL value is calculated by calculating the average of each decision row of regret table, if there's an equally likely criteria. (refer the EOL Table given below).
Andy
EMV = 1200
Which dealer should be used to minimize the EOL using the probabilities shown in the table?
EOL using probabilities is calculated by multiplying the decision values by corresponding probabilities for each decision and corresponding state.
Andy
EMV = 120
Which dealer should be used according to the MAXIMAX decision rule?
Determine the maximum value of each decision (row) and list that in a separate column. and then select the maximum value out of that column.
Charlie
EMV = -31800
Which dealer should be used according to the MAXIMIN decision rule?
Determine the minimum value of each decision (row) and list that in a separate column. and then select the maximum value out of that column.
Andy
EMV = -69750
Which dealer should be used to maximize the EMV if there is an equally-likely criteria?
Determine the average value of each decision (row) and list that in a separate column. and then select the maximum value out of that column.
Andy
EMV = -50700
Which dealer should be used to maximize the EMV using the probabilities shown in the table?
Determine the Expected value multiplying the payoff with corresponding probability of each decision (row) and list that in a separate column. and then select the maximum value out of that column. (payoff table is given below)
Andy
EMV = -50475
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