The following matrix gives the expected savings in equipment maintenance costs for three different policies of preventive maintenance (M1, M2, M3) and three levels of operation of the equipment (L1, L2, L3).
|
L1 |
L2 |
L3 |
| M1 |
$90,000 |
$30,000 |
$60,000 |
| M2 |
$50,000 |
$80,000 |
$80,000 |
| M3 |
$60,000 |
$75,000 |
$20,000 |
a. Which policy should be chosen under the Laplace Principle?
b. Which policy should be chosen under the maximax rule?
c. Which alternative should be chosen under the Hurwicz rule with a = 0.8?