Jones Inc. needs to make a decision under uncertainty. Given the information below evaluate

their options.

Alternatives Favourable

market

Average

market

Unfavourable

market

Large machine

$ $137,500$ $ $50,000$ $ $-75,000$

Small machine

$ $100,000$ $ $30,000$ $ $-5,000$

Outsource

$ $50,000$ $ $20,000$ $ $-500$

Do nothing $ $0$ $ $0$

$ $0$

a$)$ What is the best decision using maximax? $(2$ points$)$

b$)$ What is the best decision using maximin? $(2$ points$)$

a$)$ What is the best decision using equally likely? $(2$ points