What would be best decision based on maximax criterion

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Reference no: EM1361328

Various Decision Models

A manager is deciding whether or not to build a small facility. Demand is uncertain and can be either at a high or low level. If the manager chooses a small facility and demand is low, the payoff is $300. If the manager chooses a small facility and demand is high, the payoff is $100. On the other hand, if the manager chooses a large facility and demand is low, the payoff is -$200, but if demand is high, the payoff is $800.

(a) What would be the best decision based on the maximax criterion?

(b) What would be the best decision based on the maximin criterion?

Reference no: EM1361328

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