Payoffs Associated with each Combination of Alternatives and Events

These payoffs may be profits, revenues, costs, or other measure of value. Usually the measures are financial. They may be weekly, monthly or annual amounts, or they might represent values of future cash flows. Usually, payoffs are estimated values. The more accurate these estimates, the more likely it is that the decision maker will choose an appropriate alternative. If the number of alternatives is m and the number of states of nature is n, m´ n possible payoffs must be determined.