Answer Happy

QUESTION 5 Supposing Petromin intends to build another oil refinery in PNG apart from the existing 2 small oil refineries (refer to question 2 above). The alternatives are to either build a big refinery, medium refinery, small refinery or no refinery at all. It has forecast the demand for its oil against the 4 alterative as shown in the table below. Alternatives Build large refinery Build medium refinery Build small refinery No refinery High demand 650000 150000 70000 0 Outcomes Moderate demand 543000 100000 40000 0 Low demand 325000 65000 20000 0 Undertake a decision analysis. Specifically, apply the maximax, maximin, Laplace and minimax (regret) approaches. Interpret your results.