A Small Parts Manufacturer Has Just Engineered a New Product

question 43

Multiple Choice

A small parts manufacturer has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand. The following payoff table describes the company's decision situation: The value of the Hurwicz decision criterion for subcontract production when the coefficient of optimism is 0.30 is

• A) $92,500.
• B) $182,500.
• C) $250,000.
• D) $275,000.

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Definitions:

Equivalent

Denoting entities, ideas, or statements that have the same value, meaning, or function in a particular context.

Propositions

Statements or assertions that express a judgement or opinion, which can be either true or false.

Propositions

Statements that can be either true or false, serving as the basic blocks of arguments in logic.

Equivalent

Having equal value, function, or meaning in a given context.