Even though independent gasoline stations have been having a difficult time. 1 answer below »
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Even though independent gasoline stations have been having a difficult time, Susan Solomon has been thinking about starting her own independent gasoline station. Susan’s problem is to decide how large her station should be. The annual returns will depend on both the size of her station and a number of marketing factors related to the oil industry and demand for gasoline. After a careful analysis, Susan developed the following table:
Size of first station
Good Market
Fair Market
Poor Market
Small
Medium
Large
Very Large
For example, if Susan constructs a small station and the market is good, she will realize a profit of.
(a) Develop a decision table for this decision.
(b) What is the maximax decision?
(c) What is the maximin decision?
(d) What is the equally likely decision?
(e) What is the criterion of realism decision? Use a value of
(f) Develop an opportunity loss table.
(g) What is the minimax regret decision?
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