The director of career advising at Orange Community College wants to use decision analysis to provide information to help students decide which 2-year degree program they should pursue. The director has set up the following payoff table for six of the most popular and successful degree programs at OCC that shows the estimated 5-year gross income ($) from each degree for four future economic conditions:
|
Degree Program
|
Economic Conditions
|
|
Recession
|
Average
|
Good
|
Robust
|
|
Graphic Design
|
145,000
|
175,000
|
220,000
|
260,000
|
|
Nursing
|
150,000
|
180,000
|
205,000
|
215,000
|
|
Real Estate
|
115,000
|
165,000
|
220,000
|
320,000
|
|
Medical Tech
|
130,000
|
180,000
|
210,000
|
280,000
|
|
Culinary Tech
|
115,000
|
145,000
|
235,000
|
305,000
|
|
Computer IT
|
125,000
|
150,000
|
190,000
|
250,000
|
|
Probability
|
0.2
|
0.4
|
0.3
|
0.1
|
Determine the best degree program in terms of projected income, using the following decision criteria:
a. Maximax
b. Maximin
c. Equal likelihood
d. Hurwicz (alpha = .6)
e. Minimax regret
f. EOL (expected opportunity loss)
g. The director of career advising at Orange Community College has paid a small fee to a local investment firm to indicate a probability for each future economic condition over the next 5 years, which is shown in the last row of the above table. Using expected value determine the best degree program in terms of projected income.
h. Determine the EVPI of this problem.