8. ABC Inc. must make a decision on its current capacity for next year. Estimated profits (in $000s) based on next year's demand are shown in the table below. Next Year's Demand High $200 $120 $50 Alternative Low Expand $100 Subcontract $50 Do Nothing $40 Refer to the information above. a. Which alternative should be chosen based on the maximax criterion? b. Which alternative should be chosen based on the maximin criterion? c. Which alternative should be chosen based on the Lapalce criterion? d. Which alternative should be chosen based on criterion of realism with alpha=0.7? e. Which alternative should be chosen based on the minimax regret criterion?

8. ABC Inc. must make a decision on its current capacity for next year. Estimated profits (in $000s) based on next year's demand are shown in the table below. Next Year's Demand High $200 $120 $50 Alternative Low Expand $100 Subcontract $50 Do Nothing $40 Refer to the information above. a. Which alternative should be chosen based on the maximax criterion? b. Which alternative should be chosen based on the maximin criterion? c. Which alternative should be chosen based on the Lapalce criterion? d. Which alternative should be chosen based on criterion of realism with alpha=0.7? e. Which alternative should be chosen based on the minimax regret criterion?

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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