The Operations Manager for a Local Bus Company Wants to Decide

Multiple Choice

The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, moderate, or high, as follows.

If he uses Bayes' decision rule, which size bus will he decide to purchase?

A) Small
B) Medium
C) Large
D) Either small or medium
E) Either medium or large