A Firm Is Weighing Three Capacity Alternatives: Small, Medium, and Large

question 49

Essay

A firm is weighing three capacity alternatives: small, medium, and large job shop. Whatever capacity choice is made, the market for the firm's product can be "moderate" or "strong." The probability of moderate acceptance is estimated to be 40%; strong acceptance has a probability of 60%. The payoffs are as follows. Small job shop, moderate market = $24,000; Small job shop, strong market = $54,000. Medium job shop, moderate market = $20,000; medium job shop, strong market = $64,000. Large job shop, moderate market = -$2,000; large job shop, strong market = $96,000. Which capacity choice should the firm make?

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Definitions:

Socially Acceptable

Behaviors, actions, or norms that are considered appropriate and acceptable within society or a specific social group.

Men

Adult human males, often highlighted within studies or discussions focusing on gender-specific characteristics, roles, or issues.

Gender Differences

The distinctions in characteristics, behaviors, psychological processes, and societal roles associated with being male or female.

Cultural Differences

Variations in the norms, values, behaviors, and practices among different groups, often related to geographical regions, nationalities, or ethnic backgrounds.