Ques 1.

The owner of the Humber Lakeshore Construction Company must decide among building a condo, constructing a shopping centre, or leasing all the company's equipment to another company. The profit that will result from each alternative will be determined by whether material costs remain stable, increase moderately, or increase significantly. In the payoff table below the estimated profits/losses are given in $ thousands. Increase Increase h . Centre Determine the best decision using the Maximax decision criterion. Decision: Condo based on 2470 = max(2470,1830,1030) Decision: Leasing based on 2790 = max(190,2690,2790) Decision: Condo based on 2130 = max(2130,'|830,1030) Decision: Stable based on 2130 = max(2130,1030,1030) The owner of the Humber Lakeshore Transport Company must decide among manufacturing 10 new transport trucks, manufacturing 20,000 new electric scooters, or leasing all their manufacturing equipment to another company. The profit that will result from each alternative will be determined by whether material costs remain stable, increase moderately, or increase significantly. In the payoff table below the estimated profits/losses are given in $thousands. Material Costs I a 0 Moderate Significant Increase Increase Determine the best decision using the Maximin decision criterion. Stable 0 Decision: Transport based on 170 = min('|70,950,550) 0 Decision: Stable based on 950 = max(950,550,-2350) 0 Decision: Leasing based on 2350 = min(170,950,2350) 0 Decision: Scooters based on 950 = max(170,950,-2350) The owner of the Long Branch Computer Hardware Company must decide among building 100 servers, building 5000 hard drives, or leasing all their equipment to another company. The profit that will result from each alternative will be determined by whether material costs remain stable, increase moderately, or increase significantly. In the payoff table below the estimated profits/losses are given in $thousands. Material Costs Moderate Increase 1000 Significant Increase -'|7O Stable Servers 1800 Hard Drives 650 700 Leasing 2150 800 -2500 Determine the best decision using the Equal likelihood (Laplace) decision criterion. Round to the nearest integer. 0 Decision: Servers based on 877 = max(877,650,150) 0 Decision: Servers based on 2630 = max(2630,1950,450) 0 Decision: Hard Drives based on 1817 = max(990,650,1817) 0 Decision: Servers based on 1315 = max(1315,975,225) 0 Decision: Stable based on 1517 : max(1517,817,657) The owner of the Humber North Fashion Company must decide among mass producing 100,000 turtle neck sweaters, designing and producing 10,000 new gala dresses, or leasing their production facilities to another company. The profit that will result from each alternative will be determined by whether material costs remain stable, increase moderately, or increase significantly. In the payoff table below the estimated profits/losses are given in $thousands. Material Costs Moderate Increase Significant Stable Increase Turtle Necks Gala Dresses 1930 850 2000 2350 Leasing 500 700 Determine the best decision using the Hurwicz criterion with a. = 0.3. Decision: Gala Dresses based on -1045 = min(236,-1045,640) Decision: Turtle Necks based on 1204 : max(1204,695,780) Decision: Stable based on 950 = max(950,550,1435) Decision: Leasing based on 620 = max(236,-1045,620) The owner of the Humber Lakeshore Construction Company must decide among building a condo, constructing a shopping centre, or leasing all the company's equipment to another company. The profit that will result from each alternative will be determined by whether material costs remain stable, increase moderately, or increase significantly. In the payoff table below the estimated profits/losses are given in $ thousands. Material Costs Moderate Significant Stable Increase Increase Condo 2150 700 2400 Shopping Decision 1810 1050 170 Centre Leasing 820 940 1010 (a) Construct Opportunity Loss (Regret) Table Material Costs Stable Moderate Increase Significant Increase Condo Shopping Decision Centre Leasing (b) Determine the best decision using the Opportunity Loss decision criterion. O Decision: Condo based on 3760 = min(1520,3760,1440) O Decision: Shopping Centre based on 1180 = min(3410,1180,1330) O Decision: Leasing based on min = 110 O Decision: Condo based on 3410 = max (3410, 1180,1330)