A chained bread company is considering developing new products, which defines the alternatives, and currently there are four types of products that can be possibly considered. The new products will be sold in different channels including supermarkets, Japanese restaurants, Italian restaurants, and hotels, which defines the states of nature. You are given the following payoff table measured in terms of profit.

Question 4 (25 marks) A chained bread company is considering developing new products, which defines the alternatives, and currently there are four types of products that can be possibly considered. The new products will be sold in different channels including supermarkets, Japanese restaurants, Italian restaurants, and hotels, which defines the states of nature. You are given the following payoff table measured in terms of profit. State of Nature Sie S24 S32 S44 4 Product Alternatives A12 252 302 202 144 A24 172 142 252 212 A34 224 224 224 224 4 A42 29 234 264 274 a. 1. Suppose there is no probability, answer the following questions in a decision analysis problem. Which alternative should be chosen under Maximax strategy? Max(A1) = 30 Max(A2) = 25 Max(A3) = 22- Max(A4) = 29 Maximax 30, so Al would be chosen. b. Which alternative should be chosen under Maximin strategy? c. Construct an opportunity loss table (regret table) and determine the best alternative using Minimax Regret strategy. 2. Suppose that the following probabilities can be achieved from previous study, the probabilities of S1, S2, S3 and S4 are 0.15,0.2, 0.3, and 0.35 respectively. a. If you want to maximize the expected payoff, which alternative should be chosen? Find the maximum expected value. b. If the cost to get the perfect information is open to negotiation, how large can the upper bound cost be