Response to the following problem:
The local operations manager for the IRS must decide whether to hire 3, 4, or 5 temporary workers. He estimates that net revenues will vary with how well taxpayers comply with the new tax code.
Workers - Low Compliance - Medium Compliance - High Compliance 3 - 60 - 65 - 654 - 95 - 70 - 155 - 125 - 65 - (-15)
a) If he uses the maximin criterion, how many new workers will he hire?
b) If he uses the minimax regret criterion, how many new workers will he hire?
c) If he thinks the chances of low, medium, and high compliance are 25%, 40%, and 35% respectively, what are the expected net revenues for the number of workers he willdecide to hire? If he thinks the chances of low, medium, and high compliance are 10%, 45%, and 45%respectively,
d) what is the expected value of perfect information?