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

question 20

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 = 0.4, 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:

New Orleans

A major United States port city, known for its vibrant music scene, unique dialects, diverse culture, and as the historical cradle of jazz.

Stressor

An event or condition that causes stress or strain, capable of triggering a physiological and psychological response.

Successful Move

A strategic or beneficial action or decision that leads to achieving a desired goal or outcome.

Frustration

A feeling of dissatisfaction, often accompanied by anxiety or depression, resulting from unmet needs or unresolved problems.