Decision

Investment
Motel
Restaurant
Theater
Maximax decision =
Maximin decision =

States of Nature
Gasoline Availablity
Shortage
Stable Supply
Surplus
-$7,500
$12,000
$23,000
$3,000
$7,000
$6,500
$5,000
$6,000
$4,000

Maximum Minimum
$23,000
-$7,500
$7,000
$3,000
$6,000
$4,000

$23,000
$4,000

Regret Table
Decision
Investment
Motel
Restaurant
Theater
Minimax regret =

States of Nature
Gasoline Availablity
Shortage
Stable Supply
Surplus
$12,500
$0
$0
$2,000
$5,000
$16,500
$0
$6,000
$19,000
$12,500

Hurwicz
alpha =
1 - alpha =
Motel
Restaurant
Theater

0.3
0.7
$1,650
$4,200
$4,600

Decision:

Theater

$9,167
$5,500
$5,000

Decision:

Motel

Equal Likelihood
Motel
Restaurant
Theater

Maximum
$12,500
$16,500
$19,000

Summary
a) maximax
b) maximin
c) minimax regret
d) Hurwicz (alpha = 0.4)
e) Equal Likelihood

Decision
$23,000
$12,500
Restaurant
$41,400
$14,000

Motel
Motel or Theater
Motel or Restaurant
Theater
Motel

Decision Tables
Data
Profit
Probability
Sun Visors
Umbrellas

Rain

Overcast

Sunshine

0.35

0.25

0.4

-400
2100

-200
0

1500
-800

Opportunity Loss Table

Rain
Overcast
Probability
0.35
0.25
Sun Visors
2500
200

Umbrellas

Decision:

Sunshine
0.4
0

EV
Sun Visor
Umbrella

410
415

EOL
Sun Visor
Umbrella

925
920

2300

Umbrella
Minimize your Expected Opportunity Loss

Real estate Development

Decision Tables

Project

Decline (0.45)

Office park
Office
building
Warehouse

$0.40

Interest
Rate
Stable
(0.35)
$1.55

2.5

1.8

2.75

Office building

1.7

1.45

1.5

Warehouse

Mall
Condominium
s

0.8

2.3

3.7

Mall

3.2

1.5

0.5

Condominiums

Project

Opportunity Loss table

Interest
Rate
Stable
Decline (0.45)
(0.35)

Office park
Office
building
Warehouse
Mall
Condominium
s
EVPI

Increase
(0.2)
$3.50

Office park

Increase
(0.2)

EV
Decision

Office Building

Economic Conditions
Degree Program

Graphic design
Nursing
Real estate
Medical technology
Culinary technology
Computer information
technology
Maximax decision =
Maximin decision =

Recession
150,000
160,000
125,000
135,000
110,000
130,000

Average
175,000
180,000
165,000
180,000
145,000
150,000

Good
220,000
205,000
220,000
210,000
235,000
190,000

Robust
200,000
215,000
210,000
270,000
205,000
245,000

$270,000
$160,000

Med Technology
Nursing

Recession
10,000
0
35,000
25,000
50,000

Average
5,000
0
15,000
0
35,000

Good
15,000
30,000
15,000
25,000
0

Robust
70,000
55,000
60,000
0
65,000

30,000

30,000

45,000

25,000

Decision:
Decision:

Maximax
Maximin

Decision:

$99,375
Medical

Maximum Minimum

a) maximax
b) maximin

$270,000
$160,000

Real estate
Nursing

220,000

125,000

c) equal likelihood

$196,000

Real estate

270,000

135,000

d) Hurwicz (alpha = 0.5)

$189,000

Real estate

235,000

110,000

245,000

130,000

Economic Conditions

Graphic design
Nursing
Real estate
Medical technology
Culinary technology
Computer information
technology

Equal Likelihood

Graphic design
Nursing
Real estate
Medical technology
Culinary technology
Computer information
technology

$186,250
$190,000
$180,000
$198,750
$173,750
$178,750

Hurwicz
alpha =
1 - alpha =

0.4
0.6

Graphic design
Nursing
Real estate
Medical technology
Culinary technology
Computer information
technology

$178,000
$182,000
$163,000
$189,000
$160,000
$176,000

Decision:

$189,000
Medical

Decision

150,000
160,000

Regret Table
Degree Program

Summary

220,000
215,000

MAX

MIN

70,000
55,000

5,000
0

60,000
25,000

15,000
0

65,000

45,000

25,000

70,000
25,000

Robust
Robust

0.7
Shortage
250000
Compact Cars
220,000

250000
0.3
Surplus
150000
150000
0.7
Shortage
-90000

Full-sized cars

-90000

1
220000

132,000

0.3
Surplus
650000
650000
0.7
Shortage
125000

Trucks

125000
138500

0.3
Surplus
180000
170000

180000