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Mary is considering the possibility of opening a small dress shop on Uptown City Road, she has located a good Mall that attract students, she
Mary is considering the possibility of opening a small dress shop on Uptown City Road, she has located a good Mall that attract students, she has three Alternatives under three Markets scenarios, the Alternative-A: "To open a large shop", the pay-off for this alternative in good market may get $10000, and in fair market she may got $7500, and in weak market $4000. Alternative-B: "To open a medium-size shop", the pay-off for this alternative in good market may get $9000, and in fair market she may got $8500, and in weak market $5000. Alternative-C: "To open a small shop", the pay-off for this alternative is $2000 for good market and $2000 for fair market and $2000 for weak market Note that Probabilities for good market 0.45, and fair market 0.4, and weak market 0.15. (ROUND ALL CALCULATIONS in three decimal places) (a) Calculate the Hurwicz(a=65) Values for all Alternatives, then choose the optimal decision to maximize Profit (b) Find the Regret Values for all Alternatives, then choose the optimal decision to Maximize Profit (c) Calculate the Expected Monetary Values EMV for all Alternatives, then choose the optimal decision to maximize Profit (d) Calculate the expected Opportunity Loss EOL Values for all Alternatives, then choose the optimal decision to maximize Profit (e) Estimate the expected Value of Perfect Information EVPI, then determine the Maximum Value that you support to pay for Perfect Information
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