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The owner of the Sydney Construction Company must decide among building a condo, constructing a shopping centre, or leasing all the company's equipment to
The owner of the Sydney 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 1810 1040 -180 Shopping -cision 600 600 700 Centre Leasing 2150 750 -2300 ermine the best decision using the Equal likelihood (Laplace) decision criterion. and to the nearest integer. O Decision: Shopping Centre based on 1733 = :max(1010,633,1733) O Decision: Condo based on 1335 = max(1335,950,300) O Decision: Condo based on 890 = max(890,633,200) O Decision: Stable based on 1520 = max(1520,797,-593) O Decision: Condo based on 2670 = max(2670,1900,600)
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