The Quality Control Manager for NKA Inc

question 35

Short Answer

The quality control manager for NKA Inc. must decide whether to accept (alternative 1), further analyze (alternative 2), or reject (alternative 3) an incoming shipment (lot) of microchips. The historical data indicate that there is a 30 percent chance that the lot is poor quality (S₁), 50 percent chance that the lot is fair quality (S₂), and 20 percent chance that the lot is good quality (S₃). Assume the following payoff table is available. The values in the payoff table are in thousands of dollars.
What alternative action should be selected according to the maximax criterion?

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Definitions:

Heart Attack Susceptibility

The likelihood or predisposition of an individual to suffer from a myocardial infarction, often due to genetics, lifestyle, or health conditions.

Ambition

A strong desire to achieve something, typically requiring determination and hard work.

Anger

A strong feeling of displeasure or hostility triggered by what one perceives as wrong, injustice, or annoyance.

Perfectionism

A personality trait characterized by a person's striving for flawlessness and setting exceedingly high performance standards.