Naomi is planning a small festival concert downtown as part of a revitalization effort. Her next major decision is deciding upon a location.
There are four locations that are suitable for her needs. They each have very different ways to handle rainy weather. The Lima, Nickel, and Otros locations will lose space in the event that it rains, while the Morello location will lose space if it doesn't rain (the owner has a restaurant with patio seating).
Based on the available space, Naomi has calculated the net income for each location depending upon whether it rains or not. These results are shown in the attached file. <-- click="" here="" for="" excel="">
a) If Naomi uses the optimistic decision making method, she should choose the Answer location.
b)If Naomi uses the pessimistic decision making method, she should choose the Answer location.
c)If Naomi uses the minimax regret decision making method, she will find that the regret for the Nickel Boulevard location when it rains is Answer. After completing the calculations, she will choose the Answer location.
d)Naomi estimates that the probability of rain is 40% and the probability of no rain is 60%. If she uses the expected value decision making method, she will calculate the expected value of the Otros Highway to be $Answer. After completing the calculations, she will choose the Answer location.
If you get an error, be sure to use numbers only in the numerical textboxes. Do not enter any units (such as $).
Net Income |
Rain |
No Rain |
|
Lima Avenue |
93,000 |
111,000 |
|
Morello Street |
122,000 |
94,000 |
|
Nickel Boulevard |
83,000 |
132,000 |
|
Otros Highway |
67,000 |
142,000 |
|