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A commercial real estate company is evaluating a proposed warehouse. The proposed site is near a rail terminal, but the state government may extend the highway to the area. In addition, the federal government is considering rebuilding the local port facilities. Below is the payoff table in monthly profit depending upon what government actions are taken.Based on the following criteria, what are the correct choices for terminal rental?
(a) Optimistic or maximaxcriterion
(b) Pessimistic or maximin criterion
(c) Equally likely or principle of insufficient reason criterion
Warehouse size (ft2)
Development projects
Rail terminal only
Highway expansion
Port rehabilitation
All
15000
10
25
35
40
30000
15
50
60000
20
30
45
75
100000
90
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