Adele Weiss managesthe campus flower shop. Flowers must be ordered three days inadvance from her supplier in Mexico. Although Valentine’s Day isfast approaching, sales are almost entirely last-minute, impulsepurchases. Advance sales are so small that Weiss has no way toestimate the probability of low (25 dozen), medium (60 dozen), orhigh (130 dozen) demand for red roses on the big day. She buysroses for $15 per dozen and sells them for $40 per dozen.? Payofftable is given below.
| Demand for RedRoses |
Alternative | Low
(25 dozen) | Medium
(60 dozen) | High
(130 dozen) |
Order 25dozen | ?$625 | ?$625 | ?$625 |
Order 60dozen | ?$100 | ?$1,500 | ?$1,500 |
Order 130dozen | ?-$950 | ?$450 | ?$3,250 |
Donothing | ?$0 | ?$0 | ?$0 |
Which decision isindicated by each of the following decision criteria?
Maximin(pessimistic)
Maximax(optimistic)
Laplace (Equallylikely)
Minimax regret
