Maryam is considering the possibility of .1 opening a small dress shop in Sohar market. She has located a good mall that attracts students. Her options are to open a small shop, a medium-sized shop, or no shop at all. The market for a dress shop can be good, average, or bad. The probabilities for these three possibilities are 0.2 for a good market, 0.5 for an average market, and 0.3 for a bad market. The net profit or loss for the medium- sized and small shops for the various market conditions are given in the following table. Building no shop at all yields no-loss and no gain TO Alternative Good Fair Poor market market market Small shop 75,000 25,000 - 40,000 Medium 100,000 35,000 - 18 sized shop 60,000 No shop 00 00 00 T q?a. What is the best decision b. Calculate the expected value of perfect 999999 information and interpret the result 99.9999.c. Develop an opportunity loss table ?d. What is the minimax-'regret' decision (EOL) e. Find the expected opportunity loss 700.decision 8 T *Task-4 Practice Questions Maryam is considering the possibility of opening a small dress shop in Sahar market. She .1 has located a good mall that attracts students. Her options are to open a small shop, a medium-sized shop, or no shop at all. The market for a dress shop can be good, average, or bad. The probabilities for these three possibilities are 0.2 for a good market, 0.5 for an average market, and 0.3 for a bad market. The net profit or loss for the medium-sized and small shops for the various market conditions are given in the following table. Building no 1.shop at all yields no loss and no gain Alternative Good market Fair market Poor market Small shop 75,000 25,000 -40,000 Medium-sized shop 100,000 35,000 -60,000 No shop 00 00 0 ?a. What is the best decision qe9999, b. Calculate the expected value of perfect information and interpret the result 1840,0,0,.c. Develop an opportunity loss table ?d. What is the minimax 'regret' decision 909 9.decision (EOL) e. Find the expected opportunity loss
