Nathan is contemplating earning the Fellow of the American College of Healthcare Executives (FACHE) certification. He knows from experience that he can get a well-paying job with his current degree; the probability of getting a job with a salary of $40,000 per year is 75 percent and a job with a salary of $60,000 per year is 25 percent. However, if he chooses to earn the certification, his salary would likely increase; then the probability of getting a job with a salary of $80,000 per year is 75 percent and getting a job with a salary of $100,000 per year is 25 percent. Knowing that tuition cost and time spent on certification are not a concern for Nathan, should he find a job now or seek the certification?
Find the better decision using the following:
a. Develop a payoff table for Nathan's situation.
b. Find the following:
1. Maximax
2. Maximin
3. Equal likelihood
4. Minimax regret
c. Create a sensitivity graph comparing the different alternatives as the probability of getting a job changes.