Decision Theory

The following payoff table shows the profit for a decision problem with three states of nature and two Decision Alternatives (DA): State of Nature DA s1 s2 s3 d1 -20 40 100 d2 10 45 70 I need to determine what is the recommended decision using a. The optimistic approach? b. The conservative approach? c. The minmax regret approach

Quantitative Methods/Forecasting

Month 1993 January 1.45 February 1.80 March 2.03 April 1.99 May 2.32 June 2.20 July 2.13 August 2.43 September 1.90 October 2.13 November 2.56 December 4.16 3. Forecast the month of December using an exponential smoothing with a smoothing constant of 0.25. 4. Calculate the Mean Square Error (MSE). Month 1993 January 1.45 February 1.80 March 2.03 April 1.99 May 2.32 June 2.20 July 2.13 August 2.43 September 1.90 October 2.13 November 2.56 December 4.16 Using the chart above I need to: a. Forecast the month of December using an exponential smoothing with a smoothing constant of 0.25. b. Calculate the Mean Square Error (MSE).

Calculate the Mean Square Error

Calculate the Mean Square Error (MSE). Month 1993 January 1.45 February 1.80 March 2.03 April 1.99 May 2.32 June 2.20 July 2.13 August 2.43 September 1.90 October 2.13 November 2.56 December 4.16 Using the chart above I need to: a. Forecast the month of December using an exponential smoothing with a smoothing constant of 0.25. b. Calculate the Mean Square Error (MSE).

Quantitative Methods/Decision Problem

The following payoff table shows the profit for a decision problem with three states of nature and two decision alternatives: State of Nature DA s1 s2 s3 d1 -20 40 100 d2 10 45 70 I understand that the decision tree would be the breakdown between all (d,s) combinations: (d1,s1), (d1,s2), ... For each, I will have a profit. Hence, the higher profit is the winner, and I belive I am suppose to disregard to the proability attached to it. The state of nature probabilities are: P(s1) = 0.35, P(s2) = 0.35 and P(s3) = 0.30. I need to: a. Use a decision tree to recommend a decision. b, Use the expected value to recommend a decision.

Quantitative Methods/ Decision Theory

The following payoff table shows the profit for a decision problem with three states of nature and two decision alternatives: State of Nature DA s1 s2 s3 d1 -20 40 100 d2 10 45 70 I need to make a decisions using the minmax regret approachs and justify the decisions?