Use graphical sensitivity analysis to determine which decisi

Use graphical sensitivity analysis to determine which decision to select if the probability of S1 is 45%

States of Nature

Decision

s1

s2

d1

8

10

d2

4

16

d3

10

0

d2

d3

d1

d1 or d2

d2 or d3

Solution

Lets calculate probability of S1 in each of the given options:

Thus, the closest option is to go with d1

Hope this helps. Ask if you have any doubts