Question: Brooklyn bagel is preparing a plant expansion. The company can build a large or small plant. The expected payoffs for the plant depend on the level of consumer demand for Brooklyn Bagel. The company believes there is a 59% chance that demand for its bagels will be high and a 41% chance it will be low and has computed the monetary value of possible outcomes (in $millions) as shown below.

1. What is your recommended decision under each of the following criteria followed by the expected return?
   Maximin decision = Small
   Maximin expected return = 93
   
   (The minimum of the Large option is 75, and the minimum of the Small option is 93)
   Maximax decision = Large
   Maximax expected return = 190
   (The maximum of the Large option is 190, and the maximum of the Small option is 98)
   
   
   Minimax Regret decision = Large
   Minimax Regret expected return = 18
   (The maximum regret of the Large option is 18, and the maximum regret of the Small option is 92)
   
   
   Maximum Likelihood (this is not equally-likely) decision = Large
   Maximum Likelihood expected return = 190
   (The most likely demand is High , in which case the best alternative is Large , with a payoff of 190)
   
   Bayesian decision (expected monetary value) = Large
   Bayesian expected return = 142.85
   (The expected value of the option Large is
   \[190\times 0.59+75\times 0.41=142.85\]
   and the expected value of the option Small is
   \[98\times 0.59+93\times 0.41=95.95\] )
2. Calculate and interpret the value of perfect information as it pertains to this problem .

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