PART B : DECISION MAKING UNDER RISK
	EMV :- EXPECTED MONETARY VALUE
		or EXPECTED PAY OFF
	VVV IMP
	EX 1 FIND THE OPTIMAL DECISION BY EMV METHOD
	PAY OFF MATRIX
	Course of Action	State of Nature
	Alternative	S1	S2	S3
	A1	25	85	95
	A2	40	0	60
	A3	65	30	55
	Probability	0.3	0.5	0.2	1
		EXPECTED PAY OFF MATRIX
	Course of Action	State of Nature
	Alternative	S1	S2	S3	EMV
	A1	7.5	42.5	19	69
	A2	12	0	12	24
	A3	19.5	15	11	45.5
					MAX= 69
	OPTIMAL DECISION IS TO SELECT A1 BY EMV CRITERIA
	EX 2	FIND THE BEST DECISION BY EMV METHOD
			PAY OFF MATRIX
	Course of Action	State of Nature
	Alternative	S1	S2	S3	S4
	A1	35	100	38	75
	A2	58	95	105	55
	A3	45	30	91	100
	PROB	0.2	0.3	0.4	0.1
	SOLUTION
			EXPECTED PAY OFF TABLE
	Course of Action	State of Nature
	Alternative	S1	S2	S3	S4	EMV
	A1	7	30	15.2	7.5	59.7
	A2	11.6	28.5	42	5.5	87.6
	A3	9	9	36.4	10	64.4
						MAX = 87.6
	BEST DECISION IS TO SELECT A2 BY EMV CRITERIA
	EX 3	FIND THE OPTIMAL DECISION BY EMV METHOD
	Course of Action	State of Nature
	Altenative	S1	S2	S3	S4
	A1	25	30	150	80
	A2	45	120	50	130
	A3	60	100	0	-10
	A4	40	60	65	25
	PROBABILITY	0.2	0.2	0.1	0.5
			EXPECTED PAY OFF TABLE
	Course of Action	State of Nature
	Altenative	S1	S2	S3	S4	EMV
	A1	5	6	15	40	66
	A2	9	24	5	65	103
	A3	12	20	0	-5	27
	A4	8	12	6.5	12.5	39
						MAX =103
	OPTIMAL DECISION IS TO SELECT ALTERNATIVE A2 BY EMV CRITERIA
	Ex 4 :  FIND THE BEST DECISION USING EMV CRITERION
		PAY OFF MATRIX
	EVENTS	A1	A2	A3	PROB
	E1	25	-125	-10	0.6			event and state of nature is same
	E2	400	400	440	0.4
	E3	650	750	740	0.1
		PAY OFF MATRIX
			EVENTS
	ALTERNATIVES	E1	E2	E3
	A1	25	400	650
	A2	-125	400	750
	A3	-10	440	740
	PROB	0.5	0.4	0.1
			EXPECTED PAY OFF TABLE
	EVENTS	E1	E2	E3	EMV
	A1	12.5	160	65	237.5
	A2	-62.5	160	75	172.5
	A3	-5	176	74	245
					MAX = 245
	BEST DECISION IS TO CHOOSE A3 BY EMV CRITERIA
	ASSIGNMENT 3
	PAGE NO 302
	EXERCISE
	PROBLEMS 6 TO 11
	ASSIGNMENT 4
	PAGE NO 316
	EXERCISE
	PROBLEMS 15 TO 20 YOU ALL TRY EMV
	EOL : EXPECTED OPPURTUNITY LOSS
	Ex : For the following conditional pay-off table , select best decision using EOL criteria
		PAY OFF MATRIX
			EVENTS
	ALTERNATIVES	E1	E2	E3
	A1	80	60	110
	A2	40	0	50
	A3	100	-20	70
	PROB	0.3	0.2	0.5
	STEP 1
		REGRET MATRIX
			EVENTS
	ALTERNATIVES	E1	E2	E3
	A1	20	0	0
	A2	60	60	60
	A3	0	80	40
	PROB	0.3	0.2	0.5
	STEP 2
		EXPECTED OPPORTUNITY LOSS TABLE
			EVENTS
	ALTERNATIVES	E1	E2	E3	EOL
	A1	6	0	0	6
	A2	18	12	30	60
	A3	0	16	20	36
					MINIMUM = 6
	BEST DECISION IS TO CHOOSE A1 BY EOL CRITERIA
	DIV D