The operations manager for a well-drilling company must recommend whether to build a new facility, expand his existing one, or do nothing. He estimates that long-run profits (in $000)will vary with the amount of precipitation (rainfall)as follows:

If he uses the minimax regret criterion, which alternative will he decide to select?
A)do nothing
B)expand
C)build new
D)either do nothing or expand
E)either expand or build new

Question

The operations manager for a well-drilling company must recommend whether to build a new facility, expand his existing one, or do nothing. He estimates that long-run profits (in $000) will vary with the amount of precipitation (rainfall) as follows:

If he uses the minimax regret criterion, which alternative will he decide to select?

If he uses the minimax regret criterion, which alternative will he decide to select?
A)do nothing 
B)expand 
C)build new 
D)either do nothing or expand 
E)either expand or build new

Quizplus · Accepted Answer

The Answer of The operations manager for a well-drilling company must recommend whether to build a new facility, expand his existing one, or do nothing. He estimates that long-run profits (in $000)will vary with the amount of precipitation (rainfall)as follows:

If he uses the minimax regret criterion, which alternative will he decide to select?
A)do nothing 
B)expand 
C)build new 
D)either do nothing or expand 
E)either expand or build new

The Operations Manager for a Well-Drilling Company Must Recommend Whether