Quantitative Methods

The owner of the Columbia Construction Company must decide between building a housing development, constructing a shopping center, or leasing all of the company's equipment to another company. The profit that will result from each alternative will be determined by whether material costs remain stable or increase. The profit from each alternative given the two possibilities for material costs is shown in the following payoff table.

Material Costs

Decision Stable Increase

Houses $70,000 $30,000
Shopping Center $105,000 20,000
Leasing $ 40,000 40,000

Determine the best decision using the following decision criteria.
A. Maximax
B. Maximin
C. Minimax Regret
D. Hurwicz (x=.2)
E. Equal likelihood

Please show the work for each problem.

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