Build-Rite construction has received favorable publicity from guest appearances on a public TV home improvement program. Public TV programming decisions seem to be unpredictable, so Build -Rite cannot estimate the probability of continued benefits from it relationship with the show. Demand for home improvements next year may be either low or high. But Build-Rite must decide now whether to hire more employees, do nothing, or develop subcontracts with other home improvement contractors. Build-Rite has developed the following payoff table.

What is the decision based on each of the following criteria? Show work in making the decision for each criterion:

a)      Maximax

b)      Maximin

c)       Criterion of realism with coefficient of realism = 0.7

d)      Equally likely

e)      Minimax regret

Use the tables given below.

a)      Optimistic or Maximax Criterion

b)      Pessimistic or Maximin Criterion

c)       Criterion of realism with coefficient of realism = 0.7

d)  Equally likely or Principle of Insufficient Reason Criterion

e)      Minimax Regret Approach