Lecture 4 Flashcards
1
Q
Decision Theory
A
A particular branch of management science and supports its central tenet - to provide a rational way of doing things
2
Q
Maximin
A
maximise the minimum payoff given the various decisions which
are possible. By this criterion we look for the minimum payoff for each
decision (row in the payoff matrix).
3
Q
Maximax
A
maximize the maximum payoff for the different decisions, in a
strategy the reverse of maximin. We identify the maximum payoffs for each
decision (row in the payoff matrix) and then select the one which maximises
the maxima available.
4
Q
Minimax Regret
A
by this means we construct an opportunity loss or regret
matrix prior to applying the minimax rule.