Reference no: EM133031469

Assignment:

Markham Hotel is considering expanding its meeting facility. The following table shows the 3 alternatives, the states of nature and their payoffs:

Alternative	Alt#	Low Demand	Medium Demand	High Demand
2,000m² facility	1	$13,000	$44,000	$57,000
3,000m² facility	2	-$19,000	$30,000	$98,000
1,000m² facility	3	$42,000	$33,000	$33,000

1. What would be your choice if you were optimistic about the future? Write down the Alt# in the box: 

2. What would be your choice if you were pessimistic about the future? Write down the Alt# in the box: 

3. If you believed that there is equal chance for each state of nature to happen, what would be your choice? Write down the Alt# in the box: 

Regret Table

Alternative	Alt#	Low Demand	Medium Demand	High Demand	Worst
2,000m² facility	1	D	G	J	M
3,000m² facility	2	E	H	K	N
1,000m² facility	3	F	I	L	O

Using minimax regret, find out the values of D to O:

(No need to write down the $ sign and the thousand separator; e.g. if your answer is $10,000, write down 10000)

D = 

E = 

F = 

G = 

H = 

I = 

J = 

K = 

L = 

M = 

N = 

O = 

If minimax regret is to be adopted, which alternative should be selected? Write down the alt# in the box: