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WECARE, a newly formed primary care group practice, is seeking a location among five possible sites. For these practices, which are largely unregulated for their locations, the location decisions are influenced mainly by market forces and the personal preferences of the key physicians. The data on potential profit for the demand levels at each possible site are shown in Table EX 3.1 .
a. Some members of the practice are pessimists; which location would they choose?
b. There also are very optimistic members in the group; which location would they choose?
c. What would be the Laplace strategy solution for the site?
d. What is the minimax regret solution to this problem?
e. What is the solution for a Hurwitz optimism value of 0.4?
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