For a particular maximization problem, the payoff for best decision alternative is $15.7 million while the payoff for one of the other alternatives is $12.9 million. The regret associated with the alternate decision would be
a. $28.6 million. b. $15.7 million.
c. $0.129 million. d. $2.8 million.
d
RATIONALE: In decision analysis, the regret for a particular decision alternative is the absolute difference between the payoff associated with the best decision alternative and the payoff associated with the chosen decision alternative. In this case, the regret would be $15.7 million – $12.9 million = $2.8 million.
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