Hena Company limited has been faced with the decision alternatives of either Expand, Build or Subcontract...

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Hena Company limited has been faced with the decision alternatives of either Expand, Build or Subcontract its operations. The table below gives the payoff for the company at various states of nature. State of nature (Demand) Decision alternatives Expand Build High 500,000 700,000 Moderate 250,000 300,000 Low Subcontract 300,000 150,000 (250,000) (400,000) (10,000) Failure (450,000) (800,000) (100,000) i). What would the company do under minimax Regret Criterion? (5 marks) ii). Suppose you feel fairly optimistic and assign a=0.7 advise the company on what decision alternative to take using the realism criterion (5 marks) 3 CS CamScanner iii). Using the expected value criterion identify the best alternative for the probabilities: High-0.2, moderate=0.4,Low-0.3,Failure-0.1 (5 marks) Hena Company limited has been faced with the decision alternatives of either Expand, Build or Subcontract its operations. The table below gives the payoff for the company at various states of nature. State of nature (Demand) Decision alternatives Expand Build High 500,000 700,000 Moderate 250,000 300,000 Low Subcontract 300,000 150,000 (250,000) (400,000) (10,000) Failure (450,000) (800,000) (100,000) i). What would the company do under minimax Regret Criterion? (5 marks) ii). Suppose you feel fairly optimistic and assign a=0.7 advise the company on what decision alternative to take using the realism criterion (5 marks) 3 CS CamScanner iii). Using the expected value criterion identify the best alternative for the probabilities: High-0.2, moderate=0.4,Low-0.3,Failure-0.1 (5 marks)

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i Minimax Regret Criterion First calculate the regrets for each cell by subtracting the payoff in th... View the full answer