4) Dr. Mac, a surgeon, must decide what mode of treatment to use on Mr. Samuels.

Question

4) Dr. Mac, a surgeon, must decide what mode of treatment to use on Mr. Samuels. three modes of treatment: Mode A, B, and C; and three possible states of nature: 1.THea succeeds and patient leads a normal life, 2. Patient survives treatment but is permanent disabled, and 3. Patient fails to survive treatment. Dr. Mac has prepared the decision table below. What mode of treatment maximizes the expected value? r. There are Treatment Mode Outcome Normal Life Disability Non-Survival 1,000,000-$2,000,000 -$500,000 $3,000,000 -$2,500,000 $500,000 $10,000,000 -$5,000,000 |-$600,000 P(outcome P(outcome P(outcome) A) Mode B B) Mode C C) Mode A D) Normal Life E) All three treatments are equally desirable. 1

Explanation / Answer

Solution:

Option (B) is correct.

Mode C of treatment maximizes the expected value.

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