Even though independent gasoline stations have been having a difficult time, Susan Solomon has been thinking about starting her own independent gas station. Susan?s problem is to decide how large her station should be. The annual returns will depend on both the size of the station and a number of marketing factors related to oil industry and demand for gasoline. After careful analysis, Susan developed the following table:

1. Develop a decision table for this decision.

2. What is the Maximax decision?

3. What is the Maximin decision?

4. What is the criterion of realism decision? Use ? = 0.6.

5. Develop an Opportunity Loss Table

Transcribed Image Text:

Size of Gasoline Station Small Medium Large Good Market (S) $70,000 $110,000 $170,000 Fair Market (S) $30,000 $50,000 $70,000 Poor Market (S) -$30,000 -$40,000 -$50,000 Size of Gasoline Station Small Medium Large Good Market (S) $70,000 $110,000 $170,000 Fair Market (S) $30,000 $50,000 $70,000 Poor Market (S) -$30,000 -$40,000 -$50,000

Answer rating: 100% (QA)

1 Size Good market Fair market Poor market Small 70000 30000 ... View the full answer