Problem 4. A small building contractor has recently experienced two successive years in which work opportu- nities exceeded the firm's capacity. The contractor must now make a decision on capacity for next year. Estimated profits under each of the two possible states of nature are as shown in the table below. Which alternative should be selected if the decision criterion is a. Maximax? b. Maximin? c. Laplace? d. Minimax regret? NEXT YEAR'S DEMAND Alternative Low High Do nothing $50 $60 Expand 20 80 Subcontract 70 Profit in thousands 40 Problem 3. An office manager has received a report from a consultant that includes a section on equipment replacement. The report indicates that scanners have a service life that is normally distributed with a mean of 41 months and a standard deviation of 4 months. On the basis of this information, determine the percentage of scanners that can be expected to fail in the following time periods: a. Before 38 months of service. b. Between 40 and 45 months of service. c. Within + 2 months of the mean life