a) Find the optimal act using Maxi Max criteria b) Find the optimal act using Mini Max criteria c) Find the optimal act using Maxi Min criteria

Practical Management Science
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ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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An investor is to purchase one of three types of real estate, as illustrated in Figure below. The
investor must decide among an apartment building, an office building, and a warehouse. The
future states of nature that wi l1 determine how much profit the investor will make are good
economic conditions and poor economic conditions. The profits that will result from each
decision in the event of each state of nature are shown in Table below:
States of Nature
Decision
GOOD ECONOMIC
POOR ECONOMIC
(Purchase)
CONDITIONS
CONDITIONS
$ 50,000
Apartment building
Office building
$ 30,000
- 40,000
100,000
Warehouse
30,000
10,000
a) Find the optimal act using Maxi Max criteria
b) Find the optimal act using Mini Max criteria
c) Find the optimal act using Maxi Min criteria
d) Fi nd the optimal act using Min Max regret table
Transcribed Image Text:An investor is to purchase one of three types of real estate, as illustrated in Figure below. The investor must decide among an apartment building, an office building, and a warehouse. The future states of nature that wi l1 determine how much profit the investor will make are good economic conditions and poor economic conditions. The profits that will result from each decision in the event of each state of nature are shown in Table below: States of Nature Decision GOOD ECONOMIC POOR ECONOMIC (Purchase) CONDITIONS CONDITIONS $ 50,000 Apartment building Office building $ 30,000 - 40,000 100,000 Warehouse 30,000 10,000 a) Find the optimal act using Maxi Max criteria b) Find the optimal act using Mini Max criteria c) Find the optimal act using Maxi Min criteria d) Fi nd the optimal act using Min Max regret table
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