Introduction to Management Science 12th Edition by Bernard Taylor

Exercise 7

Foxcomp in Problem estimates that the probabilities of the severity of events in each of the countries are as follows:
Determine the best decision for Foxcomp using expected value.
Problem
Foxcomp, an electronics and computer manufacturer with a global supply chain, wants to add a new supplier for some of its component parts, and the suppliers it's considering are in Taiwan, India, Thailand, and the Philippines. As part of its risk management program, Foxcomp wants to assess the possible impact of a supplier shutdown in the event of a natural disaster, such as a flood, fire, tsunami, or an earthquake. The following payoff table summarizes the losses (in millions of dollars) for an extended supplier shutdown, given different levels of event severity and recovery in each country.
Determine the best decision using each of the following criteria.
a. Minimin
b. Minimax
c. Equal likelihood
d. Minimax regret