Question: The owner of the Columbia Construction Company must decide between building a housing

development, constructing a shopping center, and leasing all the company’s equipment to another company. The profit that will result from each alternative will be determined by whether material costs remain stable or increase. The profit from each alternative, given the two possibilities for material costs, is shown in the following payoff table:

Material Costs

Decision Stable Increase

Houses $ 70,000 $30,000

Shopping center 105,000 20,000

Leasing 40,000 40,000

Determine the best decision, using the following decision criteria.

a. Maximax

b. Maximin