Question

Using the below table, Fill in the regret table #18 Success Moderate Success Failure Sell Company 150 150 150 564.00 Form Joint Venture 500 135.00 Sell Software on own 881.00 400 -500 Regret Table Failure Success Moderate Success Sell Company Form Joint Venture Sell Software on own Based on the MiniMax Regret Method, what is the value for the Decision Alternative Form Joint Venture Submit

Answer 1

Correct Answer:

Regret table	success	moderate success	Failure
Sell company	731	414	0
Form joint venture	381	0	15
Sell software on own	0	164	650

Based on the minimax regret method, form joint venture must be choses. The value of minimum of the maximum regret is 381.

Working:

Regret table	success	moderate success	Failure	Maximum regret
Sell company	731 (881-150)	414 (564-150)	0 (150-150)	731
Form joint venture	381 (881-500)	0 (564-564)	15 (150-135)	381
Sell software on own	0 (881-881)	164 (564-400)	650 (150-(-500)	650

Minimum of the maximum regret must be chosen in minimax approach therefore form joint venture must be chosen, since it has the lowest regret value. Viz 381.

End of answer.

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