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Lakewood Fashions must decide how many lots of assorted ski wear to order for its three stores. Information on pricing, sales, and inventory costs has led to the following payoff table, in thousands.
Order Size, Demand Low, Medium, High
1 lot ,12,15, 15
2 lots, 9 ,25, 35
3 lots ,6, 35, 60
a. What decision should be made by the optimist?
b. What decision should be made by the conservative?
c. What decision should be made using minimax regret?
d. Assuming probabilities as follows, calculate the EVPI.
P(Low)=0.20, P(Med)=0.55, P(High)=0.25
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