The quality control manager for ENTA Inc. should make decision whether to accept (a1), further examine (a2) or reject (a3) lot of incoming material. Suppose following payoff table is available. Historical data points out that there is 30% probability that lot is poor quality (s1), 50 % probability that lot is fair quality (s2) and 20% probability that lot is good quality (s3).
What action would select according to maximax criterion?
What action would select according to maximin criterion?
Construct the regret table
What action would select according to minimax regret criterion?
What action would select according to expected value criterion?
Find maxium amount which you would be eager to pay for perfect information?