Question Set 1. National Copper and Smelting is considering adding production capacity for mining and smelting of copper for the upcoming year. The three strategies under consideration are:

Large Facility: Add machines to mine 20% more ore

Medium Facility: Add capacity to mine 10% more ore

Small Facility: Add capacity to mine 5% more ore

No Change: Do not add any additional capacity

The outcomes of the possible strategies (in millions of dollars) depend on copper prices.

	Copper Prices
Strategy	$200/ton	$220/ton	$240/ton	$260/ton
Large Facility	-150	60	45	160
Medium Facility	-25	20	25	100
Small Facility	-70	80	30	90
No Change	-30	50	50	85

For the following questions, you will use Excel to identify the best strategy according to various criteria. You only need to perform the necessary calculations to show which one is best. For example, the first question is for maximax. You need to set up formulas to find the maximum payoff for each strategy and to then find the highest value among them. However, once you have calculated that highest value, you can just type in the corresponding strategy without any further Excel calculations.

1. What would be National Coppers decision using the maximax criterion? (3pts)

2. What would be National Coppers decision using the maximin criterion? (3pts)

3. What would be National Coppers decision using the Laplace criterion? (3pts)

4. What would be National Coppers decision using the minimax regret criterion? It may be helpful to construct a regret table for this problem. (6pts)