The Operations Manager for a Well-Drilling Company Must Recommend Whether

question 14

Multiple Choice

The operations manager for a well-drilling company must recommend whether to build a new facility, expand his existing one, or do nothing. He estimates that long-run profits (in $000) will vary with the amount of precipitation (rainfall) as follows:

If he uses the minimax regret criterion, which alternative will he decide to select?

• A)do nothing
• B)expand
• C)build new
• D)either do nothing or expand
• E)either expand or build new

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Definitions:

Olfaction

The sense of smell, a chemical sensing system that detects odor molecules in the environment.

Smelling

The act or process of perceiving odors or scents through the nose.

Diffusion

The process by which molecules move from an area of higher concentration to an area of lower concentration.

Oxygen

A chemical element with symbol O and atomic number 8, essential for most life forms on Earth as part of the process of respiration.