Question

QUESTION 1 Given is a decision payoff table and a Sub Decision Payoff Table. Use Minimax Regret as an evaluation criterion to evaluate alternatives. High Future Demand Low Moderate 18 20 35 -10 31 31 Alternatives Small Facility Medium Facility Large Facility 15 21 35 Alternatives Worst Regrets ? Small Facility Medium Facility Large Facility ? ? 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 facility

Answer 1

Answer: Regret = Profit from Best Alternative - Profit from Chosen Alternative

                                                         MINIMAX REGRET TABLE

                                                                 Future Demand

Alternatives	Low	Moderate	High	Worst Regrets	Scenario
	a	b	c	= Max(a,b,c)
Small Facility	0	17	20	20	High Demand
	31-31=0	35-18=17	35-15=20
Medium Facility	11	0	14	14	Low Demand
	31-20=11	35-35=0	35-21=14
Large Facility	41	4	0	41	Low Demand
	31-(-10)=41	35-31=4	35-35=0

a) The worst regrets for alternative Small Facility is 20.

b) The worst regrets for alternative Medium Facility is 14.

c) The worst regrets for alternative Large Facility is 41.

d) The best course of action or decision by using Minimax Regret is to select Medium Facility as it has minimum worst regret of 14.

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