The owner of the Party City Toronto Company must decide between building a mega center store, building 5 new stores, or leasing 10 of their locations to another company. The profit that will result from each alternative will be determined by whether material costs remain stable, increase moderately, or increase significantly. The specialists calculated the likelihood for each possible level of material costs. In the payoff table below the estimated profit/losses are given in $$thousands.

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Mega Centre Decision New Stores Leasing Probability of State of Nature Decision Mega Centre New Stores (a) Construct Opportunity Loss (Regret) Table. Leasing Probability of State of Nature EOL(New Stores) = Stable EOL(Leasing) = 1810 2100 800 0.4 O EVPI = max EMV O EVPI = min EOL Stable 0.4 (c) Select the best decision using EOL criterion. O Decision: Mega Centre O Decision: Leasing O Decision: New Stores. (d) Which of the following formulae is correct? O EVPI = max EOL O EVPI min EMV Material Costs Moderate Increase 1020 (b) Compute the expected opportunity loss value for each decision. EOL(Mega Centre) = 700 910 0.5 Material Costs Moderate Increase 0.5 Significant Increase -160 -2450 1050 0.1 Significant Increase 0.1 Mega Centre Decision New Stores Leasing Probability of State of Nature Decision Mega Centre New Stores (a) Construct Opportunity Loss (Regret) Table. Leasing Probability of State of Nature EOL(New Stores) = Stable EOL(Leasing) = 1810 2100 800 0.4 O EVPI = max EMV O EVPI = min EOL Stable 0.4 (c) Select the best decision using EOL criterion. O Decision: Mega Centre O Decision: Leasing O Decision: New Stores. (d) Which of the following formulae is correct? O EVPI = max EOL O EVPI min EMV Material Costs Moderate Increase 1020 (b) Compute the expected opportunity loss value for each decision. EOL(Mega Centre) = 700 910 0.5 Material Costs Moderate Increase 0.5 Significant Increase -160 -2450 1050 0.1 Significant Increase 0.1