Penny$$s problem is to decide how large her Consulting firm should be$.$ The annual return depends

on both the size of her consulting firm and a number of marketing factors. After a careful analysis,

Penny developed the following table:

SIZE $($Consulting firm$)$

GOOD MARKET AVERAGE

MARKET

SMALL

$95,000$

$25000$

POOR MARKET

MEDIUM $-40000$

$1,00,000$

$37500$

LARGE $-60000$

$120000$

$50000-110000$

a$.$ What is the best decision of Penny as per criteria of realism? What is the EMV of that best

decision $($Assume $=0\mathrm{.}7)[1+1\mathrm{.}5=2\mathrm{.}5]$

b$.$ What is the best decision of Penny as per minimax regret criterion? What is the EMV of that

best decision? $[1+1\mathrm{.}5=2\mathrm{.}5][$ Clearly write down the intermediate Opportunity Loss Table$($s$)$ for

this part$]$