Risk and Uncertainty – Maximax – ACCA Performance Management (PM)
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I think my main issue is with the minimax regret, I completely have no clue how to calculate the regrets. It seems so easy here on the example you have just used because we only have two choices. It becomes complicated when we have let’s say 5 choices, but let me watch the next lecture we our initial example, then maybe I will understand the concept. Maximax and Maxmin are oky for me.
By the way, thank you very much for giving us this platform where we can iron out our short-comings through your lecture lessons. I do appreciate this opportunity as I study own my own since I cannot afford online classes. But here I have an opportunity to learn those things I struggle to understand on my own.
Thank you for your comment 馃檪
The first little example is just to explain the thinking behind the approach, but I hope you will find in the bigger example full explanation of how to do it.
The best videos thanks
Thank you Excellent Video
You are awesome John Sir!!! Can’t thank you enough for giving knowledge for free, that too with high quality! You have earned all our respect and love.
Thank you very much indeed for your comment 馃檪
hey john i need your help i always got trouble in making profit table, confused that which value is dependent and which is independent where is demand set and where is production set
I can’t give you a rule, because it all depends on the wording of the question (and certainly don’t think in terms of ‘sets’). If you refer to specific past exam questions then I will happily explain the thinking – but ask in the Ask the Tutor Forum.
Thanks John. Maximax is the maximum of the best (maximum) possible outcome or profit in our example when a course of action is taken. A risk seeker approach to decision making.
The minimax regret consider the minimum of the worst outcome (regret). A risk avoider approach to decision making.
The minimum of the maximum regret or outcome
hi sir,
why are we choosing the outcomes based on the vertical values??
shouldnt it be based on the horizontal values?
for minimax regret
We are choosing based on the outcomes for each of the possible courses of action. Which way round you set up the table is irrelevant.
sir i think i havent been able to express my question clearly
why are we making the table based on outcome A or outcome B
shouldnt it be based on Choice A or Choice B
thats what we did in maximax and maximin
We are choosing between the various possible contract sizes, just as for maximum and for maximax.
When we calculate the regret table, then for each outcome we have to compare each of the returns with the maximum return for that outcome to see how much we would ‘lose’ by choosing the ‘wrong’ contract size.