problem: The owner of Tasty Cookies needs to decide whether to lease a small, medium, or big new retail outlet. She determined that monthly profits will vary with demand for her cookies as follows:

Demand

Size of Outlet

Low

High

Small

1,000

1,000

Medium

500

2,500

Large

0

3,000

[A] If she uses the maximin criterion, what size outlet will she decide to lease?
[B] If she feels there is a 30 percent chance that demand will be high, determine the expected monthly profits for the outlet she will decide to lease?
[C] Determine her expected value of perfect information (EVPI)?