A.

Maximax

Maximum in a
Alternatives Expand Contract Unchanged
Row
No New Plant 200 -30 40 200
Build Small Plant 300 -60 60 300
Build Large Plant 400 -120 80 400 (Maximax)

B. Maximin

Minimum in a
Alternatives Expand Contract Unchanged
Row
No New Plant 200 -30 40 -30 (Maximin)
Build Small Plant 300 -60 60 -60
Build Large Plant 400 -120 80 -120

C. Laplace

Alternatives Expand Contract Unchanged Row Average

70
No New Plant 200 -30 40
(200-30+40/3)
100
Build Small Plant 300 -60 60
(300-60+60/3)
120 (Equally
Build Large Plant 400 -120 80 Likely)
(400-120+80/3)

D. Hurwicz
For the no new plant alternative using α= 0.40:
(0.40) (200) + (1 – 0.40) (-30) = 62
For the small plant alternative using α= 0.40:
(0.40) (300) + (1−0.40) (−60) = 84
For the large plant alternative using α= 0.40:
(0.40) (400) + (1−0.40) (−120) = 88

Critierion of
Alternatives Expand Contract Unchanged
Realism
 No New Plant 200 -30 40 62

Build Small Plant 300 -60 60 84

Build Large Plant 400 -120 80 88 (realism)

E. Minimax Regret

Expand Contract Unchanged

400-200 -30-(-30) 80-40

400-300 -30-(-60) 80-60

400-400 -30-(-120) 80-80

Expand Contract Unchanged

200 0 40

100 30 20

0 90 0

Maximum in a
Alternatives Expand Contract Unchanged
Row
No New Plant 200 0 40 200

Build Small Plant 100 30 20 100

Build Large Plant 0 90 0 90 (Minimax)