Explore BrainMass

Decision Tree

(See attached file for full problem description)

The following cost table is associated with a decision:

States of Nature
Decision Options S1 S2 S3
A 200 100 50
B 125 110 80
C 100 130 90

The probabilities of the states of nature are P1 = 0.55, P2 = 0.25, P3 = 0.20
a. Lay out the decision tree
b. What is the expected value of the best decision?
c. What is the expected value of perfect information?