Quantitative Management

Question (3): Based on what you have studied in decision analysis theory, solve the following problem: (12 marks) Fatima is considering the possibility of opening a small dress shop in the Diplomatic area, a few blocks far from the university. She has located a good place to attract students. Her options are to open a small shop, a medium-sized shop, or no shop at all. The market for a dress shop can be good, average, or bad. The net profit or loss for the medium-sized and small shops for the various market conditions are given in the following table. From the table above solve the following questions: a) What is the maxi-max decision (Optimistic)? (4 Mark) b) What is the maxi-min decision (pessimistic)? (4 Mark) c) What is the criterion of realism if the value of Alpha () is 0.7 ? (4 marks)