Question

In: Advanced Math

A supplier of gasoline is considering whether to build a new station. The annual returns will...

  1. A supplier of gasoline is considering whether to build a new station. The annual returns will depend on both the size of the station and marketing factors such as the oil industry and local demand of gasoline. The following data is available for decision making:

Size of Station

State of Naure         

      Good Market

          Fair Market

          Poor Market

Small

50,000

20,000

-10,000

Medium

80,000

30,000

-20,000

Large

100,000

30,000

-40,000

Very large

300,000

25,000

-160,000
  1. Develop an appropriate decision table for this case.
  2. What is the maximax decision?
  3. What is the maximin decision?
  4. What is the equally likely decision?
  5. What is the criterion of realism decision? Use α = 0.8.
  6. Develop an opportunity loss table?
  7. What is the minimax regret decision?

Solutions

Expert Solution

Colby Messinger answered 1 year ago
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