Quantitative Methods
There are 5 questions total, they are all in the attached files. The second file is the work sheet for assighnment.
A local real estate investor in Orlando is considering three alternative investments; a motel, a restaurant, or a theater. Profits from the motel or restaurant will be affected by the availability of gasoline and the number of tourists; profits from the theater will be relatively stable under any conditions. The following payoff table shows the profit or loss that could result from each investment:
Investment
Weather Conditions Shortage Stable Supply Surplus Motel $-7,500 $12,000 $23,000 Restaurant 3000 7,000 6,500 Theater 5000 6,000 4,000
Determine the best investment, using the following decision criteria.
a. Maximax b. Maximin c. Minimax regret d. Hurwicz (α = 0.4) e. Equal likelihood 2. A concessions manager at the Tech versus A&M football game must decide whether to have the vendors sell sun visors or umbrellas. There is a 35% chance of rain, a 25% chance of overcast skies, and a 40% chance of sunshine, according to the weather forecast in college junction, where the game is to be held. The manager estimates that the following profits will result from each decision,
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