Question

7.
The nature of views of decision maker is
(a) maximisation type
(b) minimisation type
(c) optimistic, pessimistic and normal
(d) stationary type​

Answer 1

Step-by-step explanation:

The nature of views of decision maker is

(a) maximisation type

(b) minimisation type

(c) optimistic, pessimistic and normal

(d) stationary type

Answer 2

The correct answer is option (a) Maximisation type.

Explanation:

• Decision makers views may be classified as maximisation type.
• The Maximax criterion is an optimistic approach.
• It suggests that the decision maker examine the maximum payoffs of alternatives and choose the alternative whose outcome is the best.
• This criterion appeals to the adventurous decision maker who is attracted by high payoffs.
• The standard view of decision making is that it is a process of rational choice based on: Knowledge of alternatives.
• Knowledge of the consequences of each of the alternatives.
• Ordered preferences by which consequences can be evaluated.