Question: A local real estate investor in Orlando is considering three alternative investments: a motel, a restaurant, or a theater. Profits from the motel or restaurant will be affected by the availability of gasoline and the number of tourists; profits from the theater will be relatively stable under any conditions. The following payoff table shows the profit or loss that could result from each investment:

……….Gasoline Availability…………………..

Investment Shortage Stable Supply Surplus

Motel $ - 8,000 $15,000 $20,000

Restaurant 2,000 8,000 6,000

Theater 6,000 6,000 5,000

Determine the best investment, using the following decision criteria.

1. Maximax
2. Maximin
3. Minimax regret
4. Hurwicz (a=.4)
5. Equal likelihood

Price: $2.99

Solution: The downloadable solution consists of 3 pages
Deliverable: Word Document