Given the following payoff table Set up the opportunity loss

Given the following payoff table: Set up the opportunity loss table.

Solution

The steps to construct a regret or opportunity loss table are given below.For each column in the payoff table

a) Determine the maximum payoff in that column.(b) Subtract each payoff in that column from the maximum payoff determined in the step (a)above.

We note that themaximum payoff for (column 1) is 20 themaximum payoff for (column 2) is5 and themaximum payoff for (column 3) is 10

	a1	a2	a3
s1	20-20	5-5	10-(-1)
s2	20-8	5-5	10-4
s3	20-(-10)	5-5	10-10