You sign up for a cell phone plan and are presented with this chart showing how your plan €œautomatically adjusts€ to the minutes you use each month. For example: If you select Option 1 and you use 700 minutes the first month, you€™ll only pay $79.99. If your usage then goes down to 200 minutes the second month, you€™ll only pay $29.99. You guess your monthly usage will be 100, 300, 500, or 700 anytime minutes. Assume the probabilities for each event are the same.

a. Create a payoff (cost) table for this decision.
b. Using the expected monetary value principle, which decision would you suggest?
c. Using the optimistic (maximax cost) approach, which decision would you suggest?
d. Using the pessimistic (maximin cost) strategy, which decision would you suggest?
e. Work out an opportunity loss table for this decision.
f. Using the minimax regret strategy, which choice would you suggest?
g. What is the expected value of perfect information?

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Optlon 1–Starting at $29.99 per Month Anytime Minutes Cost $29.99 0-200 $5 for each 50 mlnutes 201-700 Above 700 Additional anytime mlinutes only 10¢ each Optlon 2–Starting at $34.99 per Month Cost Anytime Minutes $34.99 $5 for each 50 mlnutes 0-400 401-900 Above 900 Additlonal anytime mlnutes only 10¢ each Optlon 3–Starting at $59.99 per Month Anytime Minutes Cost $59.99 0-1,000 $5 for each 50 mlnutes 1,001-1,500 Above 1,500 Additlonal anytime mlnutes only 10¢ each