is the principal owner of Brown Oil, his brother
Bob is credited with making the company a
financial success. Bob is vice president of finance.
Bob attributes his success to his pessimistic attitude
about business and the oil industry. Given the
information from Problem 3-17, it is likely that
Bob will arrive at a different decision. What decision
criterion should Bob use, and what alternative
will he select?
Although Ken Brown (discussed in Problem 3-17)
Bob has been sucessful based on his
pessimistic attitude. Based on this, Bob will
use the maximin criterion decision. The
maximin criterion is a pessimistic approach.
Bob will select Texan because it is associated
with the minimum loss of $18,000.