Management developed estimates of a contribution to profit for each type of service based upon two possible levels of demand for service to Houston: strong, medium, and weak. The following table shows the estimated quarterly profits(in thousand dollars) Construct a payoff Table

Demand for service

Service Strong Medium Weak

Full Price 770 240 -430

Discount 90 180 300

A. what is the recommended decision using the optimistic , conservative, and minimax regret approaches?

Conservative:

Minimax:

Optimistic:

B. Lets assume the probability of strong demand is 0.4, the probability of moderate is .25, and the probability of weak is .35

The recommended decision for the expected value approach to determine an optimal decision is________

If you have perfect information, the expected value with perfect perfect information is ____

c. Perform sensitivity analysis on the best decision alternative under the expected value approach from the problem to determine the range of demand probabilities for each of the decision alternatives.

i. Find the range of the payoff under Strong Demand state of nature that will keep the solution for the best decision under the expected value approach remaining optimal.

Enter Numerical Value:

ii. Find the range of payoff under moderate demand state of nature that will keep the solution for the best decision under the expected value approach remain optimal.

The minimum payoff value under moderate demand 1:_____