Question

Given the following conditional value table, determine the best alternatives under Maximax, Maximin, and Equally Likely.

	Low	Moderate	High
A	$40	$100	$60
B	$85	$60	$70
C	$65	$75	$70

Which is the best alternative using the Maximax criterion? And why?

Which is the best alternative using the Maximin criterion? And why?

Which is the best alternative using the Equally Likely criterion? And why?

Answer 1

	Low	Moderate	High	Maximum	Minimum	Average
A	$40	$100	$60	100	40	66.67
B	$85	$60	$70	85	60	71.67
C	$65	$75	$70	75	65	70

Under Maximax criteria , maximum among these three will be selected and $100 is maximum. Hence A with Moderate should be selected.

Under Maximin criteria, maximum among the minimum value is $65. Hence C with Low should be selected.

Under  Equally Likely criterion, maximum average among these three is $71.67.Hence B should be selected.