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d. Minimax regret

d. Minimax regret

Practical Management Science
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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Please answer part d. Minimax regret.
35. Suntrek, a global apparel company, is adding a new supplier for denim fabric that it uses to manufacture denim jeans, and the suppliers it's considering are located near the ports of Shanghai, Mumbai, Manila, Santos, and Veracruz. A major factor in the company's decision is transportation and shipping costs, which are dependent on several factors including port traffic, container costs, and future oil prices. The following payoff table summarizes the total monthly shipping costs (in $100,000s) for the suppliers in each of the ports, given the future state of related logistics costs. Logistics Costs Port Decrease Same Increase Shanghai $2.7 $3.9 $6.3 Mumbai 2.1 3.8 6.5 Manila 1.7 4.3 6.1 Santos 3.5 4.5 5.7 Veracruz 4.1 5.1 5.4 Determine the best decision using each of the following criteria. a. Minimin b. Minimax c. Equal likelihood d. Minimax regret
Transcribed Image Text:35. Suntrek, a global apparel company, is adding a new supplier for denim fabric that it uses to manufacture denim jeans, and the suppliers it's considering are located near the ports of Shanghai, Mumbai, Manila, Santos, and Veracruz. A major factor in the company's decision is transportation and shipping costs, which are dependent on several factors including port traffic, container costs, and future oil prices. The following payoff table summarizes the total monthly shipping costs (in $100,000s) for the suppliers in each of the ports, given the future state of related logistics costs. Logistics Costs Port Decrease Same Increase Shanghai $2.7 $3.9 $6.3 Mumbai 2.1 3.8 6.5 Manila 1.7 4.3 6.1 Santos 3.5 4.5 5.7 Veracruz 4.1 5.1 5.4 Determine the best decision using each of the following criteria. a. Minimin b. Minimax c. Equal likelihood d. Minimax regret
Port Shanghai Mumbai Manila Santos Veracruz Logistics Costs Same $3.9 Decrease $2.7 2.1 1.7 3.5 4.1 3.8 4.3 4.5 5.1 Increase $6.3 6.5 6.1 5.7 5.4
Transcribed Image Text:Port Shanghai Mumbai Manila Santos Veracruz Logistics Costs Same $3.9 Decrease $2.7 2.1 1.7 3.5 4.1 3.8 4.3 4.5 5.1 Increase $6.3 6.5 6.1 5.7 5.4
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