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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.