Trey Leeman, Operations Manager at National Consumers, Inc If Trey Uses the Maximax Criterion, the Appropriate Alternative Would

question 68

Multiple Choice

Trey Leeman, Operations Manager at National Consumers, Inc.(NCI) , is evaluating alternatives for increasing capacity at NCI's Fountain Hill plant.He has identified four alternatives, and has constructed the following payoff table which shows payoffs (in $1,000,000's) for the three possible levels of market demand. $\begin{array}{r}\text { Market Demands }\\ \begin{array}{|c|c|c|c|}\hline \text { Alternative } & \text { Low } & \text { Medium } & \text { High } \\\hline \text { Lease New Equipment } & -0.5 & 2 & 4 \\\hline \text { Purchase New Equipment } & -3 & 0.5 & 6 \\\hline \text { Add Third Shift } & 0.5 & 0.75 & 1 \\\hline \text { Do Nothing } & 0 & 0 & 0 \\\hline \end{array}\end{array}$
If Trey uses the maximax criterion, the appropriate alternative would be: _____________.

• A)Lease New Equipment
• B)Purchase New Equipment
• C)Add Third Shift
• D)Do Nothing
• E)Do everything

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Definitions:

Prenatal Development

The process of growth and development within the womb from the formation of an embryo through to the development of a fetus until birth.

Central Nervous System

The Central Nervous System (CNS) is comprised of the brain and spinal cord, functioning as the main processing center for the entire nervous system, controlling thoughts, movements, and bodily functions.

Lanugo

Lanugo is fine, soft hair that covers the body of a fetus or a newborn as a form of insulation, which is usually shed before or shortly after birth.

Progesterone

A hormone produced in the ovaries, placenta, and adrenal glands that plays a key role in the menstrual cycle and maintaining pregnancy.