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Hi sir I was wondering if you came across question ‘Envico’ on minimax regret. I have difficulties in doing the regret table.
The profit table looks like this
Demand for seats Room sized booked (seats)
100 200 300 400
100 832000 (1164800) (2662400) 3328000200 832000 2163200 665600 0
400 832000 2163200 3993600 6656000
I can do the regret table for 100 seats but can’t figure out how to do the rest of the table for 200, 300 and 400 seats.
I will be grateful if you guide me through to it.
thank you so much in advance
regards
You prepare the regret table by looking at each uncertain item in turn (so you do it for 100, 200, and 400 seats – not for 300).
If demand is 200 seats, then the best decision would have been to book room size of 200 and get contribution of 2163200
So the regrets for demand of 200 are:
Room size 100: 2163200 – 832000 = 1331200
Room size 200: 0
Room size 300: 2163200 – 665600 = 1497600
Room size 400: 2163200 – 0 = 2163200If demand is 400 seats, then the best decision would have been to book room size of 400 and get contribution of 6656000
So the regrets for demand of 400 are:
Room size 100: 6656000 – 832000 = 5824000
Room size 200: 6656000 – 2163200 = 4492800
Room size 300: 6656000 – 3993600 = 2662400
Room size 400: 0The free lecture on this will help you 🙂
Hi sir
thank you so much for your detailed answer. I went through the lecture and only then I was able to do questions. The lecture was very detailed and extremely helpful. Thank you so much for such great lectures on F5. Your lectures make it so easy to understand questions and topics indeed.
But this question seemed a bit too complicated when it came to minimax regret table. I was wondering if you do the table for demand of 100 seats as well for me. I am getting two figures right but two figures wrong. I am unable to figure out if my answer is wrong or if it is the printing error in the standard answer.
thank you so much in advance
kind regards
When you typed out the question you had a contribution of +3328000, in fact it should be -3328000
If demand is 100 seats, then the best decision would have been to book room size of 100 and get contribution of 832000
So the regrets for demand of 100 are:
Room size 100: 0
Room size 200: 832000 + 1164000 = 1996000
Room size 300: 832000 + 2662400 = 3494400
Room size 400: 832000 + 3328000 = 4160000
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