$1.$ Decision Analysis

Henderson Properties is planning to build a condominium development on St$.$ Starman Island, GA$.$ The company is trying to decide between building a small, medium, or large development The payoffs received will depend on the market demand for condominiums in the area, which could be low, medium, or high. The payoff matrix for this decision problem is:

Market Demand

Size of Development Low Medium High

Small $400400400$

Medium $200500500$

Large $-400300800$

The owner of the company estimates a $20\%$ chance that market demand will be low, a $35\%$ chance that it will be medium, and a $45\%$ chance that it will be high.

Based on the information provided, please provide a response to each of the following questions. The analysis must be provided in an Excel workbook to provide objective evidence on the result sets. Make sure you answer the questions in this Word document and post the Excel document where the analysis was calculated.

a$.$ What decision should be made according to the maximax decision rule?

Using maximax decision rule, the large department is the maximum playoff.

b$.$ What decision should be made according to the maximin decision rule?

Based on the minimax decision rule, the small

c$.$ What decision should be made according to the minimax regret decision rule?

d$.$ What decision should be made according to the EV decision rule?