1. Olive Garden is about to open a new store. Three locations are under consideration, with...

 

Transcribed Image Text:

1. Olive Garden is about to open a new store. Three locations are under consideration, with possible outcomes (depending on demand) as shown in the table to the right. Assume that the probabilities of demand states are not known (ie., uncertainty). Location Low 70 60 Large Medium Small 2. Panda Express is about to open a new store. Three locations are under consideration, with possible outcomes (depending on demand) as shown in the table to the right. The three states of demand have known probabilities: Low = 20%, Medium = 30%, and High = 50%. 130 a. (2 pts) Using the Laplace criterion, which location size(s) will be best? b. (2pts) Using the minimax regret criterion, which location size (s) will be best? Demand c. (2 pts) Using the maximin criterion, which location size (s) will be best? Low Location (20%) 35 Large Medium Small Medium 100 130 140 40 60 Demand Medium (30%) 70 75 70 a. (2pts) Which location size(s) will give the highest expected monetary value? b. (2pts) What is the expected value of perfect information? High 130 170 180 High (50%) 105 85 75 1. Olive Garden is about to open a new store. Three locations are under consideration, with possible outcomes (depending on demand) as shown in the table to the right. Assume that the probabilities of demand states are not known (ie., uncertainty). Location Low 70 60 Large Medium Small 2. Panda Express is about to open a new store. Three locations are under consideration, with possible outcomes (depending on demand) as shown in the table to the right. The three states of demand have known probabilities: Low = 20%, Medium = 30%, and High = 50%. 130 a. (2 pts) Using the Laplace criterion, which location size(s) will be best? b. (2pts) Using the minimax regret criterion, which location size (s) will be best? Demand c. (2 pts) Using the maximin criterion, which location size (s) will be best? Low Location (20%) 35 Large Medium Small Medium 100 130 140 40 60 Demand Medium (30%) 70 75 70 a. (2pts) Which location size(s) will give the highest expected monetary value? b. (2pts) What is the expected value of perfect information? High 130 170 180 High (50%) 105 85 75