An Operations Manager's Staff Has Compiled the Information Below for Four

question 6

Essay

An operations manager's staff has compiled the information below for four manufacturing alternatives (A, B, C, and
D) that vary by production technology and the capacity of the machinery. All choices enable the same level of total production and have the same lifetime. The four states of nature represent four levels of consumer acceptance of the firm's products. Values in the table are net present value of future profits in millions of dollars.

(a) Assuming a maximax strategy, which alternative would be chosen?
(b) If maximin were used, which would be chosen?
(c) If the states of nature were equally likely, which alternative should be chosen?

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Definitions:

General Account

A summary or overview that encompasses a wide range of details or information about a specific topic or area of interest.

Egoist

An egoist is someone who acts out of self-interest, prioritizing their own benefits in their decisions and actions, often at the expense of others.

Own Ends

Pursuit of one's personal goals or objectives, typically without regard to the means by which they are achieved.

Motivated

Having a strong desire to do or achieve something.