24 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 a = 0.8 ?

(e) What is her minimax regret decision?