In decision making under uncertainty, number of decision alternatives is
choose correct
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Answers
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Answer:
Concept:
Decision Making under Uncertainty, each decision alternative has more than one possible outcome, relating to various States of Nature that could occur.
Find:
In decision making under uncertainty, number of decision alternatives is
Given:
In decision making under uncertainty, number of decision alternatives is
choose correct
1
2
0
not fixed
Explanation:
Decision Making under Uncertainty, each decision alternative has more than one possible outcome, relating to various States of Nature that could occur.
Remember, while the decision maker gets to choose the alternative, events outside his or her control determine which State of Nature then occurs. The unfortunate part is that the decision must be made before the State of Nature is known. In this environment, the decision maker does not know the probabilities that any given State of Nature will occur.
As a result, the decision maker will have to consider more information, such as his willingness to take risk and how sensitive he is to suffering loss. Module 3 will cover decision making under uncertainty in more detail.
decision making under Uncertainty- When a decision involves condition about which the manager has no information, either about the outcome or the relative chances or any single outcome, he is said to be operating under conditions of uncertainty. Because the manager does not have any information on which he can develop any analysis, the best he can do is to be aware that he has no opportunity of predicting the events. Under these condition, a number of different criteria have been proposed as possible bases for decision-making.
Maximax criterion this decision criterion is applied by the most optimist decision maker when he thinks optimistically about the happening of events affecting decision.
Maximin criterion- this criterion is adopted by the most pessimistic decision maker. The manager believes that worst possible may take place.
Minimax criterion- minimax criterion leads to the minimization of regret. The managerial regret is define as the pay off for each alternative under state of nature of compitative action subtracted from the most favourable payoff which is possible with the happening of the particular event.
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