SIZE OF CROWD PRINTING ORDER 1000 1500 2000 2500 3000 ABOVE AVG 200 300 400 500
ID: 2931216 • Letter: S
Question
SIZE OF CROWD PRINTING ORDER
1000 1500 2000 2500 3000
ABOVE AVG 200 300 400 500 450
AVG 200 300 250 200 150
BELOW AVG 200 150 100 50 0
a) Develop a regret table from this payoff table and use it to determine the best choice for the number of brochures to print on the criterion of minimax regret.
b) The probability of an ABOVE AVG crowd= .20, the probability of an AVG crowd= .60, and the probability of a BELOW AVG crowd= .20. Using the criterion of mean profit (EMV), which is the best brochure size to print? Justify your answer by showing EMV for each of the 5 printing order sizes.
c) The probability of an ABOVE AVG= .20, the probability of an AVG crowd= .60, and the probability of a BELOW AVG crowd= .20. Using the criterion of mean regret (EOL), which is the best brochure size to print? Justify your answer by showing EOL for each of the 5 printing order sizes.
Explanation / Answer
a) Printing Order Size of Crowd 1000 1500 2000 2500 3000 Above Avg 300 200 100 0 50 Avg 100 0 50 100 150 Below Avg 0 50 100 150 200 Total 400 250 250 250 400 Minimax Regret: Either 1500, 2000 or 2500 b) Printing Order Size of Crowd 1000 1500 2000 2500 3000 Above Avg (0.2) 40 60 80 100 90 Avg (0.6) 120 180 150 120 90 Below Avg (0.2) 40 30 20 10 0 Total 200 270 250 230 180 EMV: 1500 c) Printing Order Size of Crowd 1000 1500 2000 2500 3000 Above Avg (0.2) 60 40 20 0 10 Avg (0.6) 60 0 30 60 90 Below Avg (0.2) 0 10 20 30 40 Total 120 50 70 90 140 EOL: 1500
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