Please answer all subparts with explanation.I will really upvote Mary is considering the possibility ofopening a small dress shop on Avenue, afew blocks from the university. She haslocated a good mall that attracts students.Her options are to open a small shop, amedium-sized shop, or no shop at all. Themarket for a dress shop can be good,average, or bad. The probabilities for thesethree possibilities are 0.2 for a good market,0.3 for an average market, and 0.5 for a badmarket. The net profit or loss for themedium-sized and small shops for thevarious market conditions are given in thefollowing table. Building no shop at allyields no loss and no gain.alternativegood market average market bad marketsmall shop45,00070,000-35,000medium sized shop 40,00055,000-12,000no shopa. Calculate the EMV criterionb. Prepare the EVPI.c. Develop the opportunity loss table forthis situation. What decisions would bemade using the minimum EOL criterion?

solution to a and b decision for EMV = medium sized shop as it gives maximum value

Answered: Mary is considering the possibility of…

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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