Applied Management Science Subject. Based on the given problem and solution below kindly answer the question.

Question #1: Determine the best decision based on the following approach presented in the second image. Kindly choose wether Maximax, Maximin or Minimax Approach and explain why.

Resources:

T. Bone Puckett, a corporate raider, has acquired a textile company and is contemplating the future of one of its major plants, located in South Carolina. 'I'hree alternative decisions are being considered: {1) expand the plant and produce lightweight, durable materials for possible sales to the military, a market with little foreign competition; [2] maintain the status quo at the plant, continuing production of textile goods that are subject to heayj.r foreign competition; or (3] sell the plant now. If one of the rst two alternatives is chosen, the plant will still be sold at the end of a year. The amount of prot that could be earned by selling the plant in a year depends on for- eign market conditions, including the status of a trade embargo bill in Congress. The following payoff table describes this decision situation: State of Nature Good Foreign Poor Foreign Decision Competitive Conditions Competitive Conditions Expand $ 300,030 $ 500,000 Maintain status quo 1,300,000 150,0{l] Sell now 320,000 320,000 A. Maximax, Maximin & Minimax Regret state of Nature Optimistic Approach Decision Conservative Approach Good Foreign Poor Foreign Decision Maximum Payoff Decision Competitive Conditions Competitive conditions Minimum Pea off Expand # 800, 00. 500, 090 Expand 800 1 000 Expand 500, 000 Maintain status quo 1, 300, 000 - 150, 000 Maintain 1, 300, 000 Maintain -150, 000 Status Qu stutus Quo Sell Now 320, 000 COo'OZE Sell Mow 320, 000 sell Now 320, 000 Maintain Maximax Decision Maximin Dec Expand 1.0 M Maximax Payoff Maximin Pay 500, 000 Minimax Regret Approach - Regret Table Minimax Decision : Expand state of Nature Minimax Regret : 500, 000 Decision Good Foreign Poor Foreign Competitive condition competitive conditions subtract 1, 3001 000 500 ,000 Expand 500, 000 O Maintain O 450 , 100 status Quo Sell Now 980, 000 180, 000