A Decision Maker Has Prepared the Following Decision Tree

question 41

Essay

A decision maker has prepared the following decision tree.There are two main decision alternatives (A and B).The probabilities for the states of nature are as follows: P(H)= .3,P(M)= .5,P(L)= .2,P(S)= .25,P(P)= .75.Calculate the highest expected profit for the decision maker and determine which of the two alternatives he/she should select.

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Definitions:

Then

At that time or subsequently.

Buy

To acquire something by paying for it; the act of purchasing.

Assertive

Characterized by confident and forceful behavior, often in expressing one's opinions or defending one's rights without being aggressive.

White Lead

A toxic chemical compound previously used in paint and cosmetics until its use was restricted due to health concerns.