Trey Leeman, Operations Manager at National Consumers, Inc If Trey Uses the Hurwicz Criterion with Alpha = 0

question 75

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 Hurwicz criterion with alpha = 0.1, 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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