Determine the best investment, using the following decision criteria:a) Maximinb) Equal Likelihoodc) Minimax Regretd) Hurwicz )alpha = 0.40)e) Maximaxf) What coefficient of pessimism should an investor so that he is indifferent on his decision to either invest in restaurant or theater? A local real estate investor in Manila is considering three alternative investments: a motel, a restaurant, or a theater. Profits fromthe motel or restaurant will be affected by the availability of gasoline and the number of tourists; profits from the theater will berelatively stable under any conditions. The following payoff table shows the profits or loss that result from each investment:InvestmentMotelRestaurantTheaterShortage(PhP80,000)20,00060,000Gasoline AvailabilityStable SupplyPhP150,00080,00060,000SurplusPhP200,00060,00050,000

NOTE: We are allowed to do the first three sub-parts only. Maximin: Maximin is a decision-making…

Answered: Determine the best investment, using…

Business

Operations Management

Determine the best investment, using the following decision criteria: a) Maximin b) Equal Likelihood c) Minimax Regret

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter9: Decision Making Under Uncertainty

Section: Chapter Questions

Problem 46P

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