Question

Brad Simpson is a farmer. Each year he tries to plant the crop that will make him the most money. He has a choice of three crops, barley, wheat or garbanzo beans. The amount he makes on each crop varies based on the amount of rain that comes during the season. A very rainy season is great for garbanzo beans (called garbos) but hurts the profit from barley. Wheat doesn’t vary much based on the rainfall. The estimated profit from each crop, based on the rainfall is in the following table:

Rainfall	Garbanzo Beans	Barley	Wheat
High (30% probability)	80,000	35,000	50,000
Low (70% probability)	20,000	60,000	40,000

Mr. Simpson only wants to plant one crop. Decide on the choice for him based on:

a) Maximin Strategy

b) Maximax Strategy

c) Minimax Regret Strategy

d) Calculate the value of perfect information.  

Answer 1