The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature.
Decision Alternative | States of Nature
----------------------------------------------
s1 | 230
s2 | 80
s3 | 5
d1 | 80
d2 | 80
d3 | 55
The probabilities for the states of nature are:
P(s1) = 0.65, P(s2) = 0.15, and P(s3) = 0.20.
(b) What is the expected value for the decision strategy developed in part (a)?
_______ (THE ANSWER IS NOT 162.6)
(c) Using the expected value approach, what is the recommended decision without perfect information? What is its expected value?
The recommended decision without perfect information is d1.
EV = _______(THE ANSWER IS NOT 75)
(d) What is the expected value of perfect information?
EVPI = __________ (THE ANSWER IS NOT 162.5)