Blackbeard's Phantom Fireworks is considering introducing two new bottle rockets. The company can add both to the current line, neither, or just one of the two. The success of these products depends on consumers' reactions. These reactions can be summarized as good (30%), fair (50%), or poor (20%). The company's revenues, in thousands of dollars, are estimated in the following payoff table. a. Compute the decision based on Maximin b. Compute the decision based on Maximax c. Compute the expected monetary value (EMV). d. Develop an opportunity loss table (regret table). e. Compute the decision based on Minimax Regret f. Compute the expected opportunity loss (EOL). g. Compute the expected value of perfect information (EVPI). Decision Probability Neither Product 1 only Product 2 only Both Payoff Table States of Nature Good Fair Poor 30% 50% 20% 0 0 0 125 65 30 105 60 30 220 110 40 The Fish House Start with the Excel workbook (spreadsheet) The Fish House - start.xlsx. The Fish House (\"TFH\") sells fresh fish and seafood. TFH receives daily shipments of farm-raised trout from a local supplier. Each trout cost $2.45, which are sold for $3.95. To maintain its reputation for freshness, at the end of each day, TFH sells any leftover trout to a local pet food manufacturer for $1.25 each. Historically, the daily demand is summarized in the table below: Demand 10 11 12 13 14 15 16 17 18 19 20 Probabilities 2% 6% 9% 11% 13% 15% 18% 11% 7% 5% 3% The owner of TFH is, of course, interested in his margin, i.e., the sales to customers + sales to pet food manufacturer - purchase cost. Use a Payoff matrix to answer the following questions. a. b. c. d. e. f. How many trout should be ordered each day by maximin? How many trout should be ordered each day by maximax? How many trout should be ordered each day by EMV? How many trout should be ordered each day by minimax regret? How many trout should be ordered each day by EOL? What is the maximum TFH should be willing to pay for a forecast (i.e. EVPI)? HINT: You will need to calculate a payoff matrix with 11 states of nature and 11 alternatives (it doesn't make sense to order fewer than 10 or more than 20). USE A FORMULA TO CALCULATE THESE 121 PAYOFF AMOUNTS (YOU WILL NEED THE MIN AND MAX FUNCTIONS). NOTE THAT SIX VALUES ARE PROVIDED TO CHECK. The number sold to customers paying $3.95 is the minimum of (1) the quantity ordered and (2) the demand. The number sold to the pet-food manufacturer is the maximum of (1) the quantity ordered minus the demand and (2) zero. Order: 10 11 12 13 14 15 16 17 18 19 10 $ 15.00 Payoff Matrix Demand: 11 12 13 14 15 16 17 18 $ 16.50 $ 22.50 $ 21.60 $ 4.20 19 20 The Fish House Reference your work below Part a b c d e f Selling Price $3.95 Purchase Cost $2.45 Surplus Price $1.25 Show work below Order: 10 11 12 13 14 15 16 17 18 19 20 10 $15.00 Demand Probabilities 10 2% 11 12 13 Payoff Matrix Demand: 14 15 16 17 18 19 20 $16.50 $22.50 $21.60 $4.20 $30.00 11 6% 12 9% 13 11% 14 13% 15 15% 16 18% 17 11% 18 7% 19 5% 20 3%