A Manager Is Deciding Whether or Not to Build a Small

question 93

Essay

A manager is deciding whether or not to build a small facility.Demand is uncertain and can be either at a high or low level.If the manager chooses a small facility and demand is low, the payoff is $300.If the manager chooses a small facility and demand is high, the payoff is $100.On the other hand, if the manager chooses a large facility and demand is low, the payoff is -$200, but if demand is high, the payoff is $800.
(a)What would be the best decision based on the maximax criterion?
(b)What would be the best decision based on the maximin criterion?
(c)What would be the best decision based on the minimax regret?

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Definitions:

Crisis Recovery Stage

The phase in crisis management where an organization works to restore stability, rebuild reputation, and implement changes to prevent future crises.

Social Responsibility

The idea that businesses and individuals should act ethically and contribute positively to the welfare of society.

Benoit's Theory

A communication theory by William L. Benoit focusing on image repair discourse, outlining strategies individuals or organizations use to mitigate damage to their reputation.

Crisis

A significant and unexpected event that threatens an organization's operations, reputation, or stakeholders, requiring immediate response.