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Zaki has been thinking about starting his own petrol station. He’s problem is to decide how large his petrol station should be. The annual return that will be achieved depends on whether the economy is good, fair, or poor. A payoff table has been constructed to illustrate this situation: (Business Quantitative Analysis)     Determine using the best investment using the following decision criteria: a) Maximax criterion   b) Maximin criterion   c) Equally Likely criterion     d) Minimax Regret criterion     The probabilities of good market, average market, and poor market are 0.4, 0.5, and 0.1 respectively. Construct an expected opportunity loss table. Using minimum EOL as the decision criterion, determine the best alternative

Zaki has been thinking about starting his own petrol station. He’s problem is to decide how large his petrol station should be. The annual return that will be achieved depends on whether the economy is good, fair, or poor. A payoff table has been constructed to illustrate this situation: (Business Quantitative Analysis)     Determine using the best investment using the following decision criteria: a) Maximax criterion   b) Maximin criterion   c) Equally Likely criterion     d) Minimax Regret criterion     The probabilities of good market, average market, and poor market are 0.4, 0.5, and 0.1 respectively. Construct an expected opportunity loss table. Using minimum EOL as the decision criterion, determine the best alternative

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Zaki has been thinking about starting his own petrol station. He’s problem is to decide how large his petrol station should be. The annual return that will be achieved depends on whether the economy is good, fair, or poor. A payoff table has been constructed to illustrate this situation: (Business Quantitative Analysis)

 

 

Determine using the best investment using the following decision criteria: a) Maximax criterion

 

b) Maximin criterion

 

c) Equally Likely criterion  

 

d) Minimax Regret criterion  

 

The probabilities of good market, average market, and poor market are 0.4, 0.5, and 0.1 respectively. Construct an expected opportunity loss table. Using minimum EOL as the decision criterion, determine the best alternative

Fund Market, Returns (RM in millions) Good Market Fair Market Poor Market Small 30,000 10,000 -5,000 Medium 60,000 20,000 -15,000 Large 80,000 20,000 -35,000 Very large 280,000 15,000 -155,000
Transcribed Image Text:Fund Market, Returns (RM in millions) Good Market Fair Market Poor Market Small 30,000 10,000 -5,000 Medium 60,000 20,000 -15,000 Large 80,000 20,000 -35,000 Very large 280,000 15,000 -155,000
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