Problem 1.

Laplace, Wald or pessimistic, optimistic, Hurwicz and Savage criteria

(Profit Matrix):

In the company ABC several alternatives are presented to choose the best technology of four p
performance depends on the adaptation of the workers who will manipulate the equipments th
The expected benefits of each alternative and degree of adaptation of the workers are given i
millions of pesos ($). For Hurwicz please assume an alpha of 0,7.

Event
Fits
Alternative Does not fit Fits acceptably Fits well
successfully
Technology 1 2118 2168 2213 2265
Technology 2 2109 2158 2245 2252
Technology 3 2145 2177 2232 2256
Technology 4 2130 2166 2206 2255
Technology 5 2128 2165 2213 2275

According to Table 1 by applying the criteria of Laplace, Wald or pessimistic, optimistic criteria,
Savage determine the optimal decision level according to the benefit criteria.

Criteria of Laplace

p(i) (1/5) (1/5) (1/5) (1/5)

Fits
Alternative Does not fit Fits acceptably Fits well
successfully
Technology 1 2118 2168 2213 2265
Technology 2 2109 2158 2245 2252
Technology 3 2145 2177 2232 2256
Technology 4 2130 2166 2206 2255
Technology 5 2128 2165 2213 2275

The optimal solution is use the technology 5

Criteria of Wald o pessimistic

p(i) (1/5) (1/5) (1/5) (1/5)

Fits
Alternative Does not fit Fits acceptably Fits well
successfully
Technology 1 2118 2168 2213 2265
Technology 2 2109 2158 2245 2252
 Technology 3 2145 2177 2232 2256
Technology 4 2130 2166 2206 2255
Technology 5 2128 2165 2213 2275

The optimal solution is use the technology 3

Criteria of optimistic

Fits
Alternative Does not fit Fits acceptably Fits well
successfully
Technology 1 2118 2168 2213 2265
Technology 2 2109 2158 2245 2252
Technology 3 2145 2177 2232 2256
Technology 4 2130 2166 2206 2255
Technology 5 2128 2165 2213 2275

The optimal solution is use the technology 5

Criteria of Hurwicz

Valor de α = 0.7

Fits
Alternative Does not fit Fits acceptably Fits well
successfully
Technology 1 2118 2168 2213 2265
Technology 2 2109 2158 2245 2252
Technology 3 2145 2177 2232 2256
Technology 4 2130 2166 2206 2255
Technology 5 2128 2165 2213 2275

coefficient optimistic
Technology 1 2330 0.7 1631 +
Technology 2 2328 0.7 1629.6 +
Technology 3 2303 0.7 1612.1 +
Technology 4 2322 0.7 1625.4 +
Technology 5 2335 0.7 1634.5 +

The optimal solution is use the technology 5

Criteria of Savage

Fits
Alternative Does not fit Fits acceptably Fits well
successfully
 Technology 1 2118 2168 2213 2265
Technology 2 2109 2158 2245 2252
Technology 3 2145 2177 2232 2256
Technology 4 2130 2166 2206 2255
Technology 5 2128 2165 2213 2275
2145 2177 2245 2275

The higher value of each column is subtracted the initial value

Fits
Alternative Does not fit Fits acceptably Fits well
successfully
Technology 1 27 9 32 10
Technology 2 36 19 0 23
Technology 3 0 0 13 19
Technology 4 15 11 39 20
Technology 5 17 12 32 0

The optimal solution is use the technology 5

and Savage criteria

e the best technology of four possible, whose

manipulate the equipments that comprise it.
tion of the workers are given in the table, in
ssume an alpha of 0,7.

Fits very well

2330
2328
2303
2322
2335

pessimistic, optimistic criteria, Hurwicz and

efit criteria.

(1/5) VM
Fits very well

2330 2,218.80
2328 2,218.40
2303 2,222.60
2322 2,215.80
2335 2,223.20

(1/5) VM
Fits very well max-min

2330 2,118
2328 2,109
 2303 2,145
2322 2,130
2335 2,128

Fits very well max-max

2330 2,330
2328 2,328
2303 2,303
2322 2,322
2335 2,335

Fits very well

2330
2328
2303
2322
2335

coefficient pessimistic RESULT

2118 0.3 635.4 2,266.40
2109 0.3 632.7 2,262.30
2145 0.3 643.5 2,255.60
2130 0.3 639 2,264.40
2128 0.3 638.4 2,272.90

Fits very well

 2330
2328
2303
2322
2335
2335

Fits very well

5 32
7 36
32 32
13 39
0 32
Problem 2. Criteria of Laplace, Wald or pessimistic, optimistic, Hurwicz and Savage (Co
matrix):

A warehouse of finished products that leases its services to imports from the USA, must plan i
supply to satisfy the demand of its customers in the day of love and friendship. The exact num
is not known, but is expected to fall into one of five categories: 610, 630, 680, 715 and 730 cra
are therefore four levels of supply. The deviation from the number of hoppers is expected to re
additional costs, either due to excessive supplies or because demand can not be met. The tab
shows the costs in hundreds of dollars (US $). For Hurwicz please assume an alpha of 0,75.

Event
Alternative\Event e1(610) e2(630) e3(680) e4(715)
e1(610) 2109 2197 2236 2271
e2(630) 2112 2152 2228 2281
e3(680) 2137 2168 2240 2275
e4(715) 2110 2176 2238 2286
e5(730) 2136 2173 2243 2287

According to Table 2 by applying the criteria of criteria of Laplace, Wald or pessimist

optimistic, Hurwicz and Savage determine the optimal decision level according to the criteria
costs.

Criteria of Laplace

Alternative\Event e1(610) e2(630) e3(680) e4(715)

e1(610) 2109 2197 2236 2271
e2(630) 2112 2152 2228 2281
e3(680) 2137 2168 2240 2275
e4(715) 2110 2176 2238 2286
e5(730) 2136 2173 2243 2287

The optimal solution is for e2

Criteria of Wald o pessimistic

Alternative\Event e1(610) e2(630) e3(680) e4(715)

e1(610) 2109 2197 2236 2271
e2(630) 2112 2152 2228 2281
e3(680) 2137 2168 2240 2275
 e4(715) 2110 2176 2238 2286
e5(730) 2136 2173 2243 2287

The optimal solution is for e2

Criteria of optimistic

Alternative e1(610) e2(630) e3(680) e4(715)

e1(610) 2109 2197 2236 2271
e2(630) 2112 2152 2228 2281
e3(680) 2137 2168 2240 2275
e4(715) 2110 2176 2238 2286
e5(730) 2136 2173 2243 2287

The optimal solution is for e1

Criteria of Hurwicz

Valor de α = 0.75

Alternative\Event e1(610) e2(630) e3(680) e4(715)

e1(610) 2109 2197 2236 2271
e2(630) 2112 2152 2228 2281
e3(680) 2137 2168 2240 2275
e4(715) 2110 2176 2238 2286
e5(730) 2136 2173 2243 2287

Alternative\Event coefficient optimistic

e1(610) 2109 0.75 1581.75 +
e2(630) 2112 0.75 1584 +
e3(680) 2137 0.75 1602.75 +
e4(715) 2110 0.75 1582.5 +
e5(730) 2136 0.75 1602 +

The optimal solution is for e2

Criteria of Savage

Alternative\Event e1(610) e2(630) e3(680) e4(715)

e1(610) 2109 2197 2236 2271
 e2(630) 2112 2152 2228 2281
e3(680) 2137 2168 2240 2275
e4(715) 2110 2176 2238 2286
e5(730) 2136 2173 2243 2287
2109 2152 2228 2271

Alternative\Event e1(610) e2(630) e3(680) e4(715)

e1(610) 0 45 8 0
e2(630) 3 0 0 10
e3(680) 28 16 12 4
e4(715) 1 24 10 15
e5(730) 27 21 15 16

The optimal solution is for e2

 c, Hurwicz and Savage (Cost

ts from the USA, must plan its level of

nd friendship. The exact number of crates
0, 630, 680, 715 and 730 crates. There
of hoppers is expected to result in
mand can not be met. The table below
e assume an alpha of 0,75.

e5(730)
2332
2315
2317
2331
2329

Laplace, Wald or pessimistic,

evel according to the criteria of

e5(730)
2332 2,229.00
2315 2,217.60
2317 2,227.40
2331 2,228.20
2329 2,233.60

e5(730) max-min
2332 2,332.00
2315 2,315.00
2317 2,317.00
 2331 2,331.00
2329 2,329.00

e5(730) max-max
2332 2109.00
2315 2112.00
2317 2137.00
2331 2110.00
2329 2136.00

e5(730)
2332
2315
2317
2331
2329

coefficient pessimistic RESULT

2332 0.25 583.00 2,164.75
2315 0.25 578.75 2,162.75
2317 0.25 579.25 2,182.00
2331 0.25 582.75 2,165.25
2329 0.25 582.25 2,184.25

e5(730)
2332
 2315
2317
2331
2329
2315

e5(730) VE
17 45
0 10
2 28
16 24
14 27
Problem 3. Criteria of Laplace, Wald or pessimistic, optimistic, Hurwicz and Savage
(Cost matrix):

A warehouse of finished products that leases its services to imports from the USA, must plan i
to satisfy the demand of its customers in the day of love and friendship. The exact number of c
known, but is expected to fall into one of five categories: 580, 720, 750, 790 and 830 crates. T
therefore four levels of supply. The deviation from the number of hoppers is expected to result
costs, either due to excessive supplies or because demand can not be met. The table below s
in hundreds of dollars (US $). For Hurwicz please assume an alpha of 0,55.

Event
Alternative\Event e1(610) e2(630) e3(680) e4(715)
e1(610) 1147 1152 1238 1283
e2(630) 1109 1193 1222 1298
e3(680) 1106 1181 1245 1281
e4(715) 1134 1177 1246 1276
e5(730) 1149 1197 1248 1260

According to Table 3 by applying the criteria of criteria of Laplace, Wald or pessimistic,

optimistic, Hurwicz and Savage determine the optimal decision level according to the
criteria of costs.

Criteria of Laplace

Alternative\Event e1(580) e2(720) e3(750) e4(790)

e1(580) 1147 1152 1238 1283
e2(720) 1109 1193 1222 1298
e3(750) 1106 1181 1245 1281
e4(790) 1134 1177 1246 1276
e5(830) 1149 1197 1248 1260
The optimal solution is for e1

Criteria of Wald o pessimistic

Alternative\Event e1(580) e2(720) e3(750) e4(790)

e1(580) 1147 1152 1238 1283
e2(720) 1109 1193 1222 1298
e3(750) 1106 1181 1245 1281
 e4(790) 1134 1177 1246 1276
e5(830) 1149 1197 1248 1260
The optimal solution is for e1

Criteria of optimistic

Alternative e1(610) e2(630) e3(680) e4(715)

e1(610) 1147 1152 1238 1283
e2(630) 1109 1193 1222 1298
e3(680) 1106 1181 1245 1281
e4(715) 1134 1177 1246 1276
e5(730) 1149 1197 1248 1260

The optimal solution is for e3

Criteria of Hurwicz

Valor de α = 0.55

Alternative\Event e1(610) e2(630) e3(680) e4(715)

e1(610) 1147 1152 1238 1283
e2(630) 1109 1193 1222 1298
e3(680) 1106 1181 1245 1281
e4(715) 1134 1177 1246 1276
e5(730) 1149 1197 1248 1260

Alternative\Event coefficient optimistic

e1(610) 1147 0.55 630.85 +
e2(630) 1109 0.55 609.95 +
e3(680) 1106 0.55 608.3 +
e4(715) 1134 0.55 623.7 +
e5(730) 1149 0.55 631.95 +
The optimal solution is for e2

Criteria of Savage

Alternative\Event e1(610) e2(630) e3(680) e4(715)

e1(610) 1144 982 1019 1032
e2(630) 1175 1019 857 1019
e3(680) 1069 1138 1044 1094
 e4(715) 1019 932 1200 1032
e5(730) 1007 1032 894 1188
1007 932 857 1019

Alternative\Event e1(610) e2(630) e3(680) e4(715)

e1(610) 137 50 162 13
e2(630) 168 87 0 0
e3(680) 62 206 187 75
e4(715) 12 0 343 13
e5(730) 0 100 37 169
The optimal solution is for e1
 Hurwicz and Savage

from the USA, must plan its level of supply

hip. The exact number of crates is not
750, 790 and 830 crates. There are
ppers is expected to result in additional
be met. The table below shows the costs
of 0,55.

e5(730)
1311
1314
1346
1349
1328

Wald or pessimistic,
l according to the

e5(830)
1311 1226.20
1314 1227.20
1346 1231.80
1349 1236.40
1328 1236.40

e5(830) max-min
1311 1311.00
1314 1314.00
1346 1346.00
 1349 1349.00
1328 1328.00

e5(730) max-max
1311 1147.00
1314 1109.00
1346 1106.00
1349 1134.00
1328 1149.00

e5(730)
1311
1314
1346
1349
1328

coefficient pessimistic RESULT

1311 0.45 589.95 1,220.80
1314 0.45 591.3 1,201.25
1346 0.45 605.7 1,214.00
1349 0.45 607.05 1,230.75
1328 0.45 597.6 1,229.55

e5(730)
1069
1057
1182
 932
1200
932

e5(730)
137 162
125 168
250 250
0 343
268 268
Problem 4. Game Theory method:

Graphical solutions are only applicable to games in which at least one of the players has only two
strategies. Consider the following 2 x n game:

Player 2
Strategy
A B C
I 27 33 38
Player 1
II 19 25 31

According to Table 4 find the value of the game by means of the graphical method applied to matrices 2
x n or m x 2.

Player 2
Strategy
A B C
I 27 33 38
Player 1
II 19 25 31

Solution:
1. Saddle point testing

Player 2
Strategy
A B C
I 27 33 38
Player 1
II 19 25 31

We apply the maximin (minimax) principle to analyze the game.

Player 2
Strategy
A B C
I 27 33 38
Player 1
II 19 25 31
Column
27 33 38
Maximum

Select minimum from the maximum of columns

 Column MaxiMin = (27)

Select maximum from the minimum of rows

Row MiniMax = [27]

Here, Column MaxiMin = Row MiniMax = 27

∴ This game has a saddle point and value of the game is 27

Player 1 is winning 27
ers has only two

d applied to matrices 2

Row
Minimum
27
19
Problem 5. Game Theory method:

Graphical solutions are only applicable to games in which at least one of the players
has only two strategies. Consider the following m x 2 game:

Player 2
Strategy
A B
I 27 33
Player 1 II 19 25
III 33 37

According to Table 5 find the value of the game by means of the graphical method
applied to matrices 2 x n or m x 2.

Player 2
Strategy
A B
I 27 33
Player 1 II 19 25
III 33 37

Solution:
1. Saddle point testing

Player 2
Strategy
A B
I 27 33
Player 1 II 19 25
III 33 37

We apply the maximin (minimax) principle to analyze the game.

Player 2 Row
Strategy
A B Minimum
I 27 33 27
Player 1 II 19 25 19
III 33 37 33
Column
33 37
Maximum

Select minimum from the maximum of columns

 Column MaxiMin = (33)
Select maximum from the minimum of rows
Row MiniMax = [33]

Here, Column MaxiMin = Row MiniMax = 33

∴ This game has a saddle point and value of the game is 33

Player 1 is winning 33