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(a) Construct Opportunity Loss (Regret) Table Material Costs Stable Moderate Increase Significant Increase Servers Hard Decision Drives Leasing (b) Determine the best decision using the
(a) Construct Opportunity Loss (Regret) Table Material Costs Stable Moderate Increase Significant Increase Servers Hard Decision Drives Leasing (b) Determine the best decision using the Opportunity Loss decision criterion. O Decision: Servers based on 3990 = min(1490,3990, 1430) O Decision: Servers based on 3470 = max(3470, 1 190, 1320) O Decision: Leasing based on min = 110 O Decision: Hard Drives based on 1190 = min(3470, 1190, 1320)The owner of the Long Branch Computer Hardware Company must decide among building 100 servers, building 5000 hard drives, or leasing all their equipment to another company. The profit that will result from each alternative will be determined by whether material costs remain stable, increase moderately, or increase significantly. In the payoff table below the estimated profits/losses are given in $thousands. Material Costs Moderate Increase Signicant Increase Stable 21 50 500 -2450 Hard Drives 1850 1020 Leasing 830 910 Servers -170 1020 (a) Construct Opportunity Loss (Regret) Table Material Costs Stable Moderate Increase Significant Increase Servers Hard Drives Leasing
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