Question (3): Based on what you have studied in decision analysis theory, solve the following problem: (10 marks)

Fatima is considering the possibility of opening a small dress shop the Diplomatic area, a few blocks 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 probabilities for these three possibilities are 0.2 for a good market, 0.5 for an average market, and 0.3 for a bad market. The net profit or loss for the medium- sized and small shops for the various market conditions are given in the following table.

	State of Nature
Alternatives	Good market ($)	Average market ($)	Bad market ($)
Small shop	75 000	25 000	40 000
Medium-sized shop	000	35 000	60 000
No shop	0	0	0

From the table above solve the following questions:

1. What is the maxi-max decision (Optimistic)? (3 Mark)
2. What is the maxi-min decision (pessimistic)? (3 Mark)
3. Determine the EMV criterion if the decision- making environment is under risk. (4 marks)