Business Statistics

736 Business Statistics

19.3.5  Regret Criterion

In this criterion, a decision maker selects the course of action that minimizes the maximum regret. For

applying this criterion, the given payoff matrix is converted into an opportunity loss or regret matrix

using the procedure discussed in the previous section. After this, the decision maker determines the

maximum regret for each act and then selects the overall minimum regret value from the list of maxi-

mum regret values. Then the decision maker chooses the act corresponding to the overall minimum

regret value.

In the curd pack example, from the opportunity loss table (Table 19.4), maximum ...