Question

For a particular maximization problem, the payoff for the best decision alternative is $15.7 million while the payoff for one of the other alternatives is $12.9 million. The regret associated with the alternate decision would be

Answer 1

Answer: $2.8million

Explanation:

The regret associated with the alternate decision would be calculated as the difference between the payoff for the best decision alternative which is $15.7 million and the payoff for one of the other alternatives which is $12.9 million. This will be:

= $15.7million - $12.9million

= $2.8million

The regret associated with the alternate decision is $2.8million.