What is her minimax regret decision ive seen this

Reference no: EM13624967

A souvenir retailer has an opportunity to establish a new location inside a large airport. The annual returns will depend primarily on the size of the space she rents and if the economy will be favorable. The retailer has worked with the airport concession commission, and has projected the following possible annual earnings associated with renting a small, medium, large or very large space:

Size Good Economy Fair Economy Poor Economy

Small $70,000 $28,000 -$14,000

Medium $112,000 $ 42,000 -$28,000

Large $ 140,000 $42,000 -$56,000

Very Large $ 420,000 $35,000 -$224,000

a) What is the souvenir retailer's maximax decision?

b) What is her maximin decision?

c) What is her equally likely decision?

d) What is her criterion of realism decision, using? = 0.8?

e) What is her minimax regret decision? (I've seen this answered other places as small but I find it to be the very large space because once the calculations are done that comes out to $210,000 where the small one comes to $350,000)

Reference no: EM13624967

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