Alt S$1$ S$2$

$1102$

$2-28$

$385$

a$)$ If the manager uses maximin as the decision criterion, which of the alternatives should she choose?

b$)$ If the manager uses minimax regret as the decision criterion, which of the alternatives would she choose?

c$)$ Use the expected value criterion to select the best alternative. Assume that the probability of S$2$ is equal to $0\mathrm{.}4.$

$4)$ The local operations manager for the IRS must decide whether to hire $1,2,$ or $3$ temporary workers. He estimates that net revenues $($in thousands$)$ will vary with how well taxpayers comply with the new tax code.

a$)$ If he uses the maximin criterion, how many new workers will he hire

b$)$ If he uses the minimax regret criterion, how many new workers will he hire?

c$)$ If he thinks the chances of low, medium, and high compliance are $20\%,30\%,$ and $50\%,$ respectively, what are the expected net revenues for the number of workers he will decide to hire?