The Quality Control Manager for NKA Inc

question 55

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 maximin criterion?

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Definitions:

Behavioral Form

Behavioral form pertains to the observable actions or responses of an individual in a particular environment or context.

Temper Tantrum

An emotional outburst, typically characterized by crying, screaming, or stubbornness, often occurring in young children as a response to frustration or lack of control.

Regressing

The act of returning to a previous state or condition, often in psychological contexts referring to a return to earlier stages of behavior or development.

Displacing

The process of transferring feelings or emotions from the original source to another target.