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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) Find the optimal act using Min-Max regret table

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) Find the optimal act using Min-Max regret table

Principles of Management
Principles of Management
OER 2019th Edition
ISBN:9780998625768
Author:OpenStax
Publisher:OpenStax
Chapter8: Strategic Analysis: Understanding A Firm’s Competitive Environment
Section: Chapter Questions
Problem 4CRQ: What is a firms micro environment, and why is it important?
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Question 4
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 will 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:

 

 

 


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) Find the optimal act using Min-Max regret table 

States of Nature Decision GoOD ECONOMIC Poor ECONOMIC (Purchase) CONDITIONS CONDITIONS $ 50,000 Apartment building Office building Warehouse $ 30,000 - 40,000 100,000 30,000 10,000
Transcribed Image Text:States of Nature Decision GoOD ECONOMIC Poor ECONOMIC (Purchase) CONDITIONS CONDITIONS $ 50,000 Apartment building Office building Warehouse $ 30,000 - 40,000 100,000 30,000 10,000
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