3. Microchip is planning a new facility and considering a location in the following countries. Depending on the conomic conditions for the next 3 years, the following costs have been estimnated (SUS million). ECONOMIIC CONDITIONS Country Same Korca 193 China Decline Improve 21.7 15.2 19.0 18.5 17.6 India 19.2 17.1 14.9 225 Philippines 168 Singapore 21.2 13.8 25.0 12.5 Which alternative would be selected if: a) The decision maker is an optimist (Minimin)? b) The decision maker is a pessimist (Minimax)? ) The decision maker has an index of optimism of 0.4? 4) The decision maker wants to use the Minimax regret criterion?

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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Assignment No. 11(Decision Analysis)
Answer 3 c, d

restaurant. The construction costs are about the same, but the
monthly profits can be affecteld by future economie
conditions in the area. The following table shows the monthly
net operating revenmue that could result from cach project.
ECONOMY
CONDITIONS
Project
Good
Motel
Poor
Fair
$7,000
S15,000
Restaurant
10,000
SI8,000
3,000
20,000
Theater
10,000
11,000
13,000
Determine the best investment using the following decision
criteria:
a) Maximax
b) Maximin
c) Minimax Regret
d) Hurwicz (a- 0.4) Index of optimism
e) Equal likelihood
3. Microchip is planning a new facility and considering a
location in the following countries. Depending on the
economic conditions for the next 3 years, the folowing costs
have been estimnated (SUS million).
ECONOMIIC
CONDITIONS
Docline
Country
Same
Korea
Improve
21.7
19.3
15.2
China
19.0
18.5
India
17.1
17.6
19.2
14.9
Philippines
16.8
22.5
13.8
Singapore
21.2
25.0
12.5
Which altermative would be selected if:
a) The decision maker is an optimist (Minimin)?
b) The decision maker is a pessimist (Minimax)?
e) The decision maker has an index of optimism of 0.4?
d) The decision maker wants to use the Minimax regret
criterion?
Transcribed Image Text:restaurant. The construction costs are about the same, but the monthly profits can be affecteld by future economie conditions in the area. The following table shows the monthly net operating revenmue that could result from cach project. ECONOMY CONDITIONS Project Good Motel Poor Fair $7,000 S15,000 Restaurant 10,000 SI8,000 3,000 20,000 Theater 10,000 11,000 13,000 Determine the best investment using the following decision criteria: a) Maximax b) Maximin c) Minimax Regret d) Hurwicz (a- 0.4) Index of optimism e) Equal likelihood 3. Microchip is planning a new facility and considering a location in the following countries. Depending on the economic conditions for the next 3 years, the folowing costs have been estimnated (SUS million). ECONOMIIC CONDITIONS Docline Country Same Korea Improve 21.7 19.3 15.2 China 19.0 18.5 India 17.1 17.6 19.2 14.9 Philippines 16.8 22.5 13.8 Singapore 21.2 25.0 12.5 Which altermative would be selected if: a) The decision maker is an optimist (Minimin)? b) The decision maker is a pessimist (Minimax)? e) The decision maker has an index of optimism of 0.4? d) The decision maker wants to use the Minimax regret criterion?
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