The construction manager for Acme, Inc. must decide whether to build single-family homes, apartments, or condominiums. She estimates annual profits will vary with the economy, as follows:
Dwelling type Weak Economy (30%) Normal Economy(40%) Strong Economy(30%)
Single family $100 $90 $70
Apartments 50 170 90
Condominiums -20 100 220
a. If he uses the maximin criterion, which type of dwellings will he choose to build? Show your supporting calculations.
b. If he uses the equally likely criterion, which kind of dwellings will he choose to build? Show your supporting calculations.
c. If the construction manager were an optimist, what criterion would he choose? What would be the choice of dwelling for that criterion? Show your supporting calculations.