Question;1. Even though independent gasoline stations have been having a;difficult time, Susan Solomon has been thinking about starting her own;independent gas station. Susan?s problem;is to decide how large her station should be.;The annual returns will depend on both the size of the station and a;number of marketing factors related to oil industry and demand for;gasoline. After careful analysis, Susan;developed the following table;Size of Gasoline Station;Good;Market ($);Fair;Market ($);Poor;Market ($);Small;$50,000;$20,000;-$10,000;Medium;$80,000;$30,000;-$20,000;Large;$100,000;$30,000;-$40,000;Very Large;$300,000;$25,000;-$160,000;a. Develop a decision table for this decision.;b. What is the Maximax decision?;c. What is the Maximin decision?;d. What is the equally likely decision?;e. What is the criterion of realism decision? Use? = 0.8.;f. Develop an Opportunity Loss Table;g. What is the Minimax Regret Decision?;2. A concessionaire for the local ballpark has developed a table of;conditional values for the various alternatives (stocking decisions) and states;of nature (size of crowd).;Stocking Decision;Large;Crowd ($);Average;Crowd ($);Small;Crowd ($);Large Inventory;$22,000;$12,000;-$2,000;Average Inventory;$15,000;$12,000;$6,000;Small Inventory;$9,000;$6,000;$5,000;If the probabilities associated with the states of nature are 0.30 for;a large crowd, 0.50 for an average crowd, and 0.20 for a small crowd;determine;a. The alternative that provides the greatest expected monetary value;(EMV).;b. The expected value of perfect information (EVPI).
Paper#53023 | Written in 18-Jul-2015Price : $31