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 shown the profit or loss that could result from each investment.

Gasoline Availability

Investment Shortage Stable Supply Surplus

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

Restuarant 2,000 8,000 6,000

Theater 6,000 6,000 5,000

Determine the best investment using the following decision criteria.

1. Maximax
   b. Maximin
   c. Minimax regret
   d. Hurwicz ( α =.4)
   e. Equal likelihood
   
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   Solution: The downloadable solution consists of 4 pages
   Deliverable: Word Document
   
   
   

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