QUESTION B2 (25 marks) (a) Sentosa Berhad is a well know construction company of the nation. The company is considering several alternatives development projects. The financial success of these projects depends on the three market conditions which are favourable market, stable market or unfavourable market. The projects and their 5-year financial returns (in RM millions) are shown in Table 3. Table 3. Market Condition Level 2 Apartment Bungalow Terrace House Favourable 55 62 79 AQ077-3-2-PSMOD Stable 74 54 69 Examine the best decisions by using the following approach: Minimax regret rule by constructing the opportunity loss table. (1) (ii) Hurwicz criterion with an alpha of 0.6. Asia Pacific University of Technology & Innovation Final Exam Unfavourable 40 38 49 (4 marks) (4 marks) 2022 Page 4 of 10 (b) A landowner of is trying to decide whether to build a playground, a swimming pool, or setup a barbeque corner on the yard. Due to some constraints, she can only afford to build one of these and she needs help in deciding which one to choose. The profitability of each will, to some extent, depend on the weather. If the weather is hot, children would prefer the swimming pool, but if the weather is cool, barbeque will be more profitable. The owner has estimated the annual profitability (in RM'000s) of each option for three states of nature (the weather) as presented in the following Table 4