Question 1:

The Brampton Honda Dealership is considering expanding its showroom facility. The following
table shows the 3 alternatives, the states of nature and their payoffs:

Small Medium Large

Facility Facility Facility

Low demand $30,000 $25,000 -$20,000

Medium demand $30,000 $50,000 $20,000
High demand $27,000 $48,000 $65,000

What would your decision be if the following rules are applied? (show your calculation)
a) Maximax
b) Maximin
c) La Place
d) Minimax-regret

Question 2:
A local KFC franchisee is evaluating the number of fried chickens to produce each day. The
following table shows the 4 alternatives, the states of nature and their payoffs:

Daily Supply
40 50 60 70
Daily 40 $80 $0 -$80 -$160
Demand 50 $80 $100 $20 -$60
60 $80 $100 $120 $40
70 $80 $100 $120 $140

What would your decision be if the following rules are applied? (show your calculation)
a) Maximax
b) Maximin
c) La Place
d) Minimax-regret