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Business Statistics, 3rd Edition
book

Business Statistics, 3rd Edition

by Naval Bajpai
April 2024
Intermediate to advanced content levelIntermediate to advanced
921 pages
37h 16m
English
Pearson India
Content preview from Business Statistics, 3rd Edition
Chapter 19
PB
Statistical Decision Theory
833
For the three nodes, expected payoff can be computed as
For North region
0.45 × 100 + 0.35 × 80 + 0.20 × 60 = 85
For South region
0.45 × –60 + 0.35 × –20 + 0.20 × 150 = –4
For East region
0.45 × –120 + 0.35 × 40 + 0.20 × 135 = –13
The analysis clearly indicates that the maximum expected payoff is attached with node 1 (north
region). Hence, a decision maker should launch the product in the north region to obtain maxi-
mum payoff.
Statistical decision theory, Bayesian decision analysis, or simply
decision analysis is a technique to make decisions under condi-
tions of uncertainty in the environment. State of nature, ...
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Publisher Resources

ISBN: 9789390168996