QUESTION 1 Given is a decision payoff table and a Sub Decision Payoff Table. Use
ID: 376259 • Letter: Q
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QUESTION 1 Given is a decision payoff table and a Sub Decision Payoff Table. Use Minimax Regret as an evaluation criterion to evaluate alternatives Future Demand Alternatives Low M Small Facilit 17 35 35 15 28 42 Medium Facility 24 Large Facilit 10 Alternatives Worst Small Facilit edium Facilit Large Facil a) The worst regrets for alternative Small Facility is b) The worst regrets for alternative Medium Facility is c) The worst regrets for alternative Large Facility is d) The best course of action or decision by using Minimax Regret is to select facilityExplanation / Answer
The first step: To solve the problem under the Minimax regret criteria, we will first prepare the regret table. It is prepared by identifying the maximum payoff in each condition (low or moderate or high) and subtract all the other payoff in that condition of future demand.
Regret Table:
Alternatives
Low
Moderate
High
Small Facility
28-28=0
35-17=18
42-15=27
Medium Facility
28-24=4
35-35=0
42-28=14
Large Facility
28-(-10)=38
35-35=0
42-42=0
In the second step, the maximum regret for each alternative will be identified.
Maximum (worst) regret for small facility = 27
Maximum (worst) regret for medium facility =14
Maximum (worst) regret for large facility = 38
In the third step, the alternative with lowest of the maximum (worst) regret will be selected.
The alternative with lowest of the maximum (worst) regret = 14
So, best course of action under the Minimax regret criteria is to select medium facility.
Alternatives
Low
Moderate
High
Small Facility
28-28=0
35-17=18
42-15=27
Medium Facility
28-24=4
35-35=0
42-28=14
Large Facility
28-(-10)=38
35-35=0
42-42=0
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