* 00 R 品 Miles is considering buying a new pickup truck for his lawn service firm. The economy in town seems to be growing, and he is wondering whether he should opt for a subcompact, compact, or full-size pickup truck. The smaller truck would have better fuel economy, but would sacrifice capacity and some durability. A friend at the Bureau of Economic Research told him that there is a 30% chance of lower gas prices in his area this year, a 20% chance of higher gas prices, and a 50% chance that gas prices will stay roughly unchanged. Based on this information, Miles has developed a decision table that indicates the profit amount he would end up with after a year for each combination of truck and gas prices. States of Nature Lower gas Gas prices Higher gas Alternatives prices unchanged prices Subcompact 000ʻ9 000'6 000ʻ Compact 15,000 Full size 000'6, 000'9 gooʻ'r Probability 0.5 0.2 Which type of truck should Miles select based on Maximin Criterion? MacBook Air 000 000 DD F2 F4 F5 F7 F8 23 5. 7. 4. 9. * 00 T み3 prices unchanged prices Subcompact 000' 000 000' Compact 000'S 0002 000'0 Full size 000'6T 000'9 000' Probability 0.3 0.5 0.2 Which type of truck should Miles select based on Maximin Criterion? Compact O Subcompact None O Full size Previous Next MacBook Air 000 000 F4 DD F7 F2 F3 F5 23 ) 2$ 9. 7. Y H.
* 00 R 品 Miles is considering buying a new pickup truck for his lawn service firm. The economy in town seems to be growing, and he is wondering whether he should opt for a subcompact, compact, or full-size pickup truck. The smaller truck would have better fuel economy, but would sacrifice capacity and some durability. A friend at the Bureau of Economic Research told him that there is a 30% chance of lower gas prices in his area this year, a 20% chance of higher gas prices, and a 50% chance that gas prices will stay roughly unchanged. Based on this information, Miles has developed a decision table that indicates the profit amount he would end up with after a year for each combination of truck and gas prices. States of Nature Lower gas Gas prices Higher gas Alternatives prices unchanged prices Subcompact 000ʻ9 000'6 000ʻ Compact 15,000 Full size 000'6, 000'9 gooʻ'r Probability 0.5 0.2 Which type of truck should Miles select based on Maximin Criterion? MacBook Air 000 000 DD F2 F4 F5 F7 F8 23 5. 7. 4. 9. * 00 T み3 prices unchanged prices Subcompact 000' 000 000' Compact 000'S 0002 000'0 Full size 000'6T 000'9 000' Probability 0.3 0.5 0.2 Which type of truck should Miles select based on Maximin Criterion? Compact O Subcompact None O Full size Previous Next MacBook Air 000 000 F4 DD F7 F2 F3 F5 23 ) 2$ 9. 7. Y H.
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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Question
Transcribed Image Text:* 00
R
品
Miles is considering buying a new pickup truck for his lawn service firm. The economy in town seems to
be growing, and he is wondering whether he should opt for a subcompact, compact, or full-size pickup
truck. The smaller truck would have better fuel economy, but would sacrifice capacity and some
durability. A friend at the Bureau of Economic Research told him that there is a 30% chance of lower
gas prices in his area this year, a 20% chance of higher gas prices, and a 50% chance that gas prices will
stay roughly unchanged.
Based on this information, Miles has developed a decision table that indicates the profit amount he
would end up with after a year for each combination of truck and gas prices.
States of Nature
Lower gas
Gas prices
Higher gas
Alternatives
prices
unchanged
prices
Subcompact
000ʻ9
000'6
000ʻ
Compact
15,000
Full size
000'6,
000'9
gooʻ'r
Probability
0.5
0.2
Which type of truck should Miles select based on Maximin Criterion?
MacBook Air
000
000
DD
F2
F4
F5
F7
F8
23
5.
7.
4.
9.
Transcribed Image Text:* 00
T
み3
prices
unchanged
prices
Subcompact
000'
000
000'
Compact
000'S
0002
000'0
Full size
000'6T
000'9
000'
Probability
0.3
0.5
0.2
Which type of truck should Miles select based on Maximin Criterion?
Compact
O Subcompact
None
O Full size
Previous
Next
MacBook Air
000
000
F4
DD
F7
F2
F3
F5
23
)
2$
9.
7.
Y
H.
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