# solution

There are four possible services:

1. Warehouse A: The initial contract fee is \$1,850. Each square foot is \$11.
2. Warehouse B: The initial contract fee is \$3,000. The first 400 square feet of space is free of charge. After that, each square foot is \$15.
3. Warehouse C: There is no contract fee. Each square foot is \$12.
4. Warehouse D: The initial contract fee is \$3600. Each square foot is \$9.

Alex can only use one of the above four possible options. Each product requires 3 square feet of storage space. Alex reviews his forthcoming 20XX production contracts and projects the following possible production outcomes and their associated probabilities:

Probability (20XX production is 288 toys)=0.40
Probability (2022 production is 375 toys)=0.35
Probability (2022 production is 580 toys)=0.25
A1. Which service should Alex select according to the conservative approach?
A2. Construct a regret table regarding the possible storage fee and report which storage service Alex should select according to the Minimax regret approach.
A3. Which storage service should Alex select according to the expected value approach?
(A-4) If a business analyst can offer Alex the perfect prediction regarding his 20XX toy production count, how much is this perfect prediction worth to Alex?

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