Question 6

An entrepreneur is going to set up a bubble tea stall at a local fair. On the day of the fair, the entrepreneur needs to decide on the quantities (Large, Medium or Small) of materials for the fair. The costs of the entrepreneur incurred depend on the numbers of people who visit the fair and the number of visitors will be based on the weather conditions (Perfect, Normal, or Poor) on that day. Use the Wald decision criterion to answer the question below:

The matrix of Costs (in thousands) for different weather conditions is given below:

Alternatives, Quantity of materials	Weather conditions
	Perfect	Normal	Bad
Large	8	12	4
Medium	14	7	10
Small	11	8	11

6.1) Use the Wald decision criterion to find the outcome for the large quantity

6.2) Use the Wald decision criterion to find the outcome for the medium quantity

6.3) Based on the Wald decision criterion result, what quantity of materials should the entrepreneur buy?

6.4) Use the Wald decision criterion to find the outcome for the small quantity