Question

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. $ 2.8 million.
b. $ 28.6 million
c. $ .129 million
d. $ 15.7 million

Answer 1

a. $ 2.8 million

Step-by-step explanation:

Calculation to determine what The regret associated with the alternate decision would be

Using this formula

Regret associate=Payoff for best decision alternative - Payoff for one of the other alternatives

Let plug in the formula

Regret associate= $15.7million - $12.9million

Regret associate= $2.8million

Therefore The regret associated with the alternate decision is $2.8million.