Lakewood Fashion must decide how many lots of assorted ski wear to order for its three stores. Information on prices, sales, and inventory costs has led to the following payoff table, in thousands:
_________Demand_________
Order Size____ Low_____ Medium__ High
1 Lot 12 15 15
2 Lots 9 25 35
3 Lots 6 35 60
REQUIRED:
1. What decision should be made by an optimist?
2. What decision should be made by a conservative?
3. What decision should be made by using minimax regret?
4. Unrelated to this problem, which approach do you personally prefer – optimistic, conservative, or minimax regret? Explain.
_________Demand_________
Order Size____ Low_____ Medium__ High
1 Lot 12 15 15
2 Lots 9 25 35
3 Lots 6 35 60
REQUIRED:
1. What decision should be made by an optimist?
2. What decision should be made by a conservative?
3. What decision should be made by using minimax regret?
4. Unrelated to this problem, which approach do you personally prefer – optimistic, conservative, or minimax regret? Explain.
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