1. The operations manager for a well-drilling company must recommend whether to build a new facility, expand his existing one, or do nothing. He estimates that long-run profits (in $000) will vary with the amount of precipitation (rainfall) as follows:

 which alternative will he decide to select, by using following criterion: (1) Maximax; (2) Laplace; and (3) Minimax regret?

ALTERNATIVE Do Nothing Expand Build New PRECIPITATION LOW -100 350 750 NORMAL 100 500 300 HIGH 300 200 0