Decision M1 M2 M3 M4 M5

P1 100,000 200,000 160,000 90,000 110,000

P2 80,000 120,000 90,000 100,000 60,000
P3 70,000 90,000 50,000 80,000 50,000
P4 90,000 100,000 80,000 75,000 60,000

Regret Table
Decision M1 M2 M3 M4 M5
P1 - - - 10,000 -
P2 20,000 80,000 70,000 - 50,000
P3 30,000 110,000 110,000 20,000 60,000
P4 10,000 100,000 80,000 25,000 50,000
 a) Maximax b) Minimin c) Maximin
200,000 P1 90,000 P1 90,000
120,000 P2 60,000 P2 60,000
90,000 P3 50,000 P3 50,000
100,000 P4 60,000 P4 60,000

Maximax 200,000 Minimin 50,000 Maximin

Decision P1 Decision P3 Decision

e) Minimax
10,000 P1
80,000 P2
110,000 P3
100,000 P4

Minimax 10,000
Decision P1
c) Maximin d) Minimax
P1 200,000 P1
P2 120,000 P2
P3 90,000 P3
P4 100,000 P4

90,000 Minimax 90,000

P1 Decision P3
 States of Nature EMV
S1 S2 S3 S4 45
Alternatives
Probabilities 47.4
0.1 0.2 0.4 0.3 48.6
A1 45 45 45 45 47.4
A2 42 48 48 48
A3 39 45 51 51 Max
A4 36 42 48 54 Decision
Decision
A1
A2
A3
A4

48.6
A3
 The Yellow box shows the best decision to make

Solution
This best decision is: A 0.3
3
$136,000
Investment A 1 $40,800
1
-$70,000 $77,550
$7,550 0.7
2
$52,500
$36,750

0.15
9
$79,000
$11,850

Investment B 1 0.55
7 11
-$50,000 $52,188 $60,250
$2,188 $33,138

0.3
8
$24,000
$7,200
 0.4
5 $300,000
$120,000
1 $120,000
3
-$20,000 $156,000
$136,000 0.6
6 $60,000
$36,000
1 $36,000
4 $45,000
$45,000
$45,000
$75,000

0.2
13 $200,000
$40,000
1 $40,000
9
-$17,000 $96,000
$79,000 0.8
14 $70,000
$56,000
1 $56,000
10 $60,000
$60,000
$60,000
0.45
15 $105,000
$47,250
1 $47,250
11
-$9,000 $69,250
$60,250 0.55
16 $40,000
 $22,000
1 $22,000
12 $55,000
$55,000
$55,000
$80,000
 The Yellow box shows the best decision to make

Solution
This best decision is: Bid

Bid 0.15
1
-$200 $1,400
$1,200

Bid
Do not bid 1
2 $0
$0
$0
 Market Research
4
$1,870
$1,870

Win Contract 0.8

9
$2,000
$1,600
Lose Contract 0.2
3 -$200
-$200
-$200
 Build Complex

Forecast High 0.6

5
$2,350
$1,410 Sell

Build Complex

Forecast Moderate 0.4

8
$1,150
$460 Sell

Build Complex

No Market Research 1
 9
$2,000
$2,000 Sell
 High Demand 0.85
11 $2,650
$2,253
$2,253
5
$2,350
$2,350 Moderate Demand 0.15
12 $650
$98
$98
6 $1,150
$1,150
$1,150

High Demand 0.225

13 $2,650
$596
$596
7
$1,100
$1,100 Moderate Demand 0.775
14 $650
$504
$504
8 $1,150
$1,150
$1,150

High Demand 0.6

15 $2,800
$1,680
$1,680
9
$2,000
$2,000 Moderate Demand 0.4
 16 $800
$320
$320
10 $1,300
$1,300
$1,300