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2. Jenny must place an order for waters to sell to customers during sporting events. Waters are sold for $2. The demand for waters depends
2. Jenny must place an order for waters to sell to customers during sporting events. Waters are sold for $2. The demand for waters depends on the level of heat in the summer. Temperature for the summer may be cool, normal, hot or blazing with probabilities of 0.20, 0.40.,0.25, and 0.15 respectively. Waters are purchased by the container. One container of 10,000 waters costs $10,000. Waters not sold at the end of the summer can be returned at a value of $0.50 each. Past experience shows that demand for a cool season is 15,000 , a normal season is 22,000 , a hot season is 28,000 and a blazing season is 38,000. a. Construct the payoff table for this problem. Justify your list of actions. b. What decision should be made according to the maximax decision rule? c. What decision should be made according to the maximin decision rule? d. What decision should be made according to the minimax regret decision rule? e. What decision should be made according to the expected value decision rule
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