Question: 1. Penny's problem is to decide how large her Consulting firm should be. The annual return depends on both the size of her consulting firm

1. Penny's problem is to decide how large her

1. Penny's problem is to decide how large her Consulting firm should be. The annual return depends on both the size of her consulting firm and a number of marketing factors. After a careful analysis, Penny developed the following table: SIZE (Consulting firm) GOOD MARKET POOR MARKET SMALL AVERAGE MARKET 25000 37500 50000 95,000 1,00,000 120000 MEDIUM LARGE -40000 -60000 -110000 a. What is the best decision of Penny as per criteria of realism? What is the EMV of that best decision (Assume a = 0.7) [1+1.5=2.5] b. What is the best decision of Penny as per minimax regret criterion? What is the EMV of that best decision? [1+1.5=2.5] [Clearly write down the intermediate Opportunity Loss Table(s) for this part]

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