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Decision making under uncertainty

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Equipment Favorable market Unfavorable market
Sub 100 $300,000 -200,000
Oiler J $250,000 -100,000
Texan $75,000 -18000

Ken has the above equipment options to buy to stay competitive. Ken is optimistic by nature.
A. What type of decision is Ken facing? I said Decsion making under Uncertainty
B. What criterion should he use? I said Maximax.
C. What alternative is best? I said Sub 100.

Bob,Kens brother, is pessimistic by nature and has the same equipment options above.

A. What decsion criterion should he use? I said Maximin.
B. What alternative will he select? I said texan.

Am i correct?

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Solution Summary

This posting contains solution to following problem on Decision Analysis.

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