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Q. construction manager for Acme, Inc. must decide whether to build single-family homes, apartments or condominiums. She approximates annual profits will vary with economy, as follows:
Dwelling type Weak Economy (30%) Normal Economy(40%) Strong Economy(30%)Single family $100 $90 $70Apartments 50 170 90Condominiums -20 100 220
a. If he uses maximin criterion which type of dwellings will he choose to build? Show your supporting calculations.
b. If he uses equally likely criterion which kind of dwellings will he choose to build? Show your supporting calculations.
c. If construction manager were an optimist, illustrate what criterion would he choose? Illustrate what would be choice of dwelling for that criterion? Show your supporting calculations.
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