A decision maker faced with four decision alternatives and four sates of nature develops the following profit payoff table.

States of nature

Decision alternative         S_1            S_2        S_3           S_4

d_1                                    14                9           10               5  

d_2                                    11               10           8               7  

d_3                                     9                10          10             11

d_4                                     8                10          11             13

(a) State and use the average payoff strategy to choose the best decision.

(b) State and use the aggressive strategy to choose the best decision.

(c) State and use the conservative strategy to choose the best decision.

(d) State and use the opportunity loss strategy to make the best decision.

(e) Suppose the decision maker obtains information that enables the following probabilities assessments:

P(s_1) = 0.5; P(s_2) = 0.2; P(s_3) = 0.2; and P(s_4) = 0.1. Use the expected value approach to determine the optimal strategy.