Use the Following Data to Answer Questions 88-100 -Refer to the Data on Expected Demand for Weston Gadgets,Inc

question 35

Multiple Choice

Use the following data to answer questions 88-100. $$\begin{array}{l} \quad \quad \quad \quad \quad \quad \quad \quad \text { Expected Demand for Weston Gadgets, Inc. }\\\begin{array} { | l | l | l | l | } \hline \text { Decision Alternative } & \text { Low 35\% } & \text { Medium 30\% } & \text { High 35\% } \\\hline \text { Outsource } & \$ 16.00 \text { million } & \$ 28.00 \text { million } & \$ 66.00 \text { million } \\\hline \text { Build capacity } & \$ 4.00 \text { million } & \$ 32.00 \text { million } & \$ 26.00 \text { million } \\\hline \text { Do nothing } & \$ 9.00 \text { million } & \$ 18.00 \text { million } & \$ 66.00 \text { million } \\\hline\end{array}\end{array}$$
-Refer to the data on Expected Demand for Weston Gadgets,Inc.Based on the Hurwicz criterion,which of the following options would you choose if you used the coefficient of realism of 0.6?

• A)Outsource
• B)Build capacity
• C)Do nothing
• D)either Outsource or Do nothing

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Definitions:

Periodic Inventory Method

An accounting approach that updates inventory and cost of goods sold at the end of an accounting period based on a physical count.

Merchandise

Goods or products that are bought and sold by businesses in the market.

Purchase Order

A document issued by a buyer to a seller indicating types, quantities, and agreed prices for products or services.