Create your own new decision criterion for decision making under uncertainty that is logical but not exactly the same as the five criteria described in Section 8.4.

(a) Describe the rule in complete detail.

(b) Apply it to Thompson Lumber’s decision (see Table 8.1).

(c) Modify the spreadsheet from Figure 8.1 to incorporate your new rule.

Table 8.1

Figure 8.1

Transcribed Image Text:

Outcomes Alternatives High Demand Moderate Demand Low Demand Build large plant $200,000 $100,000 -$120,000 Build small plant No plant $ 90,000 $ 0 $ 50,000 $ 0 -$ 20,000 $ 0