Andrew Murphy is contemplating opening a wholesale store in Bull Bay, St$.$ Thomas. His probiem is to decide how large the store should be$.$ The monthly retums will depend on bott the size of the store and the demand for products. After careful analysis the following table was developco

Size of Store

Good Market

$($S$)$

kair Marker

$($S$)$

Poor Market

$($S$)$

Smell

$30,000$

$20,000$

$-0\mathrm{.}000$

wicatum

$80,000$

$40,000$

$-20,000$

$00\mathrm{.}000$

$30\mathrm{.}000$

$-40,000$

Very Large

$350,000$

$-25,000$

$-160,000$

Patt

a$)$ I Andrew is optimistic, what decision should he make

b$)$ If Andrew uses the equally likely criteria, what decision should he make It he is pessimistc what would be his decision $1$o minimuse his maximum reeret which decision should Andrew make marks

$5$ marks

$5$ marks

No marks

Part HI

Intormation gathered intonus that the probability for a good market is $25\%$ and poor market

e$)$

What size store should Andrew consider using the EMV criteria

How much should Audrew pay a consumer consulting firm for perfect information

marks

$15$ mAPA