Independent gasoline stations

Independent gasoline stations have been having a difficult time, nevertheless Anna Li has been thinking about starting her own independent gasoline station. Anna’s problem is to decide how large her station should be. The annual returns will depend on both the size of her station and a number of marketing factors related to the oil industry and demand for gasoline. After a careful analysis, Anna developed the following table of the profit (or loss) realized for each size station based on market conditions:

SIZE OF FIRST STATION GOOD MARKET

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($)

FAIR MARKET

($)

POOR MARKET

($)

Small 60,000 25,000 -5,000
Medium 90,000 40,000 -20,000
Large 110,000 60,000 -30,000
Very large 280,000 50,000 -200,000

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Deliverables

(a) Using Excel, design a decision table for this decision.

(b) What is the maximax decision?

(c) What is the maximin decision?

(d) What is the equally likely decision?

(e) What is the criterion of realism decision? Use an α value of 0.4

NOTE: YOU MUST SHOW YOUR CALCULATIONS FOR ALL COMPUTED ANSWERS IN ORDER TO GET CREDIT. (CLOs 1,5,6)

Paper Specifics

Although this is a working paper it is also a research paper; therefore, it should be developed, organized and presented using APA formatting guidelines – including the use of a title page, citations, headings, tables, figures, references and appendices (if applicable); be sure to cite at least three scholarly researched sources.

Any calculations and graphs may be done in Excel, and then transferred to a Word document. All calculations should be clearly explained as to your assumptions and how you arrived at your answers.

Note: Though the names of the teams in the case may be familiar, they are purely fictional; do not use external sources that discuss teams with similar names to support your analysis or any conclusions you draw.

Neither an abstract or running head is necessary for this assignment.

The submitted assignment MUST BE a Word Document. (SLO11)

Paper Writing Requirements

Most classes have a 2 paper requirement per course. Please be sure to address the following requirements when completing your papers:

  • The cover page and reference page/s are not included in the above-stated page requirement. These should be in addition to page requirements.
  • Papers need to be formatted in proper APA style.
  • Each paper requires a minimum of at least three outside peer-reviewed sources for your references.
    • Acceptable/credible sources include: Academic journals and books, industry journals, and the class textbook. You could use credible business website sources in addition to these but avoid Wikipedia and Google. These are academic papers that need to include scholarly research.
  • Using your textbook is highly recommended to demonstrate that you have read the required material.

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