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 Moderate Increase Stable Significant Increase 2100 500 -2500 Transport Decision Scooters Leasing 1840 1040 -160 810 910 1010 Determine the best decision using the Maximax decision criterion. Decision: Stable based on 2100 = max(2100,1040,1010) Decision: Transport based on 2100 = max(2100,1840,1010) Decision: Transport based on 2500 = max(2500,1840,1010) Decision: Leasing based on 2730 = max(100,2720,2730) The owner of the Party City Toronto Company must decide among building a mega centre store, building 5 new stores, or leasing 10 of their locations 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 Stable Significant Increase Mega Centre 1840 1010 -160 Decision 800 1000 1000 New Stores Leasing 2100 550 -2500 Determine the best decision using the Maximin decision criterion. Decision: Leasing based on -2500 = min(-160,800,-2500) Decision: Mega Centre based on 160 = min(160,800,550) Decision: Stable based on 800 = max(800,550,-2500) Decision: New Stores based on 800 = max(-160,800,-2500) 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 Stable Significant Increase 1820 1020 -190 Servers Hard Decision Drives Leasing 2150 800 -2300 600 650 700 Determine the best decision using the Equal likelihood (Laplace) decision criterion. Round to the nearest integer. Decision: Servers based on 883 = max(883,217,650) Decision: Stable based on 1523 = max(1523,823,-597) Decision: Servers based on 2650 = max(2650,650,1950) Decision: Servers based on 1325 = max(1325,325,975) Decision: Hard Drives based on 1750 = max(1010,1750,650) 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 Stable Moderate Increase Significant Increase Condo 1950 810 -480 Shopping Decision Centre 550 1000 700 Leasing 1900 300 -2350 Determine the best decision using the Hurwicz criterion with a = 0.2. Decision: Stable based on 830 = max(830,440,-1740) Decision: Condo based on 1464 = max(1464,910,1050) Decision: Leasing based on -1500 = min(6,670,-1500) Decision: Shopping Centre based on 640 = max(6,640,-1500)
