Trey Whitmore, Operations Manager at National Consumers, Inc

question 21

Multiple Choice

Trey Whitmore, 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: 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:

Aggregate Demand

The full extent of demand for all goods and services within an economy, measured against a specified price level across a given temporal span.

Employment Act of 1946

A United States federal law aiming to promote maximum employment, production, and purchasing power through economic stability policies.

Aggregate Demand

The total demand for final goods and services in an economy at a given time.

Theory of Liquidity Preference

A theory suggesting that individuals prefer to have their resources in liquid forms and how that preference influences interest rates.