Jeffrey Helm owns a health and fitness center called Bulk-Up in Harrisburg. He is considering adding more floor space to meet increasing demand. He will either add no floor space $(\mathrm{N})$, a moderate area of floor space $(\mathrm{M})$, a large area of floor space (L), or an area of floor space that doubles the size of the facility (D). Demand will either stay fixed, increase slightly, or increase greatly. The following are the changes in Bulk-Up's annual profits under each combination of expansion level and demand change level:

	EXPANSION LEVEL
DEMAND CHANGE	N	M	L	D
Fixed	$\$0$	$-\$4,000$	$-\$10,000$	$-\$50,000$
Slight increase	$\$2,000$	$\$8,000$	$\$6,000$	$\$4,000$
Major increase	$\$3,000$	$\$9,000$	$\$20,000$	$\$40,000$

Jeffrey is risk averse and wishes to use the maximin criterion.

What should he do?

What is the EMV for Alternative 1 in the following decision table?

a) $\$ 15,000$

b) $\$17,000$

c) $\$ 17.500$

d) $\$18.500$

e) $\$ 20.000$

Andrew Thomas, a sandwich vendor at Hard Rock Cafe's annual Rockfest, created a table of conditional values for the various alternatives (stocking decision) and states of nature (size of crowd):

The probabilities associated with the states of nature are $0.3$ for a big demand, $0.5$ for an average demand, and $0.2$ for a small demand.

Compute the expected value of perfect information (EVPI).

Andrew Thomas, a sandwich vendor at Hard Rock Cafe's annual Rockfest, created a table of conditional values for the various alternatives (stocking decision) and states of nature (size of crowd):

The probabilities associated with the states of nature are $0.3$ for a big demand, $0.5$ for an average demand, and $0.2$ for a small demand.

Determine the alternative that provides Andrew the greatest expected monetary value (EMV).

If probabilities are available to the decision maker, then the decision-making environment is called:

a) certainty.

b) uncertainty.

c) risk.

d) none of the above.

What is the equally likely decision model?

Even though independent gasoline stations have been having a difficult time, Ian Langella has been thinking about starting his own independent gasoline station. Ian's problem is to decide how large his station should be. The annual returns will depend on both the size of his station and a number of marketing factors related to the oil industry and demand for gasoline. After a careful analysis, Ian developed the following table:

For example, if Ian constructs a small station and the market is good, he will realize a profit of $\$ 50,000$.

Develop a decision tree. Assume each outcome is equally likely, then find the highest EMV.

Even though independent gasoline stations have been having a difficult time, Ian Langella has been thinking about starting his own independent gasoline station. Ian's problem is to decide how large his station should be. The annual returns will depend on both the size of his station and a number of marketing factors related to the oil industry and demand for gasoline. After a careful analysis, Ian developed the following table:

For example, if Ian constructs a small station and the market is good, he will realize a profit of $\$ 50,000$.

What is the equally likely decision?

Even though independent gasoline stations have been having a difficult time, Ian Langella has been thinking about starting his own independent gasoline station. Ian's problem is to decide how large his station should be. The annual returns will depend on both the size of his station and a number of marketing factors related to the oil industry and demand for gasoline. After a careful analysis, Ian developed the following table:

For example, if Ian constructs a small station and the market is good, he will realize a profit of $\$ 50,000$.

What is the maximin decision?

Even though independent gasoline stations have been having a difficult time, Ian Langella has been thinking about starting his own independent gasoline station. Ian's problem is to decide how large his station should be. The annual returns will depend on both the size of his station and a number of marketing factors related to the oil industry and demand for gasoline. After a careful analysis, Ian developed the following table:

For example, if Ian constructs a small station and the market is good, he will realize a profit of $\$ 50,000$.

What is the maximax decision?

Smithson Cutting is opening a new line of scissors for supermarket distribution. It estimates its fixed cost to be $500.00 and its variable cost to be$0.50 per unit. Selling price is expected to average $0.75 per unit. What is Smithson's break-even point in units?

Jerry Bildery's factory is considering three approaches for meeting an expected increase in demand. These three approaches are increasing capacity, using overtime, and buying more equipment. Demand will increase either slightly $(S)$, moderately $(\mathrm{M})$, or greatly $(\mathrm{G})$. The profits for each approach under each possible scenario are as follows:

Since the goal is to maximize, and Jerry is risk-neutral, he decides to use the equally likely decision criterion to make the decision as to which approach to use. According to this criterion, which approach should be used?

After being observed many times, Beverly Demarr, a hospital lab analyst, had an average observed time for blood tests of 12 minutes. Beverly's performance rating is 105%. The hospital has a personal, fatigue, and delay allowance of 16%. Find the normal time for this process.

Even though independent gasoline stations have been having a difficult time, Ian Langella has been thinking about starting his own independent gasoline station. Ian's problem is to decide how large his station should be. The annual returns will depend on both the size of his station and a number of marketing factors related to the oil industry and demand for gasoline. After a careful analysis, Ian developed the following table:

For example, if Ian constructs a small station and the market is good, he will realize a profit of $\$ 50,000$.

Develop a decision table for this decision, like the one illustrated in Table A. 2 earlier.