The Alternatives 1 and 2 in the Following Payoff Table $\text { States of nature }$

question 29

Essay

The alternatives 1 and 2 in the following payoff table represent the two possible manufacturing strategies that the EKA manufacturing company can adopt.The level of demand affects the success of both strategies.The states of nature (S_i,i = 1,2,3)represent the levels of demand for the company products.S₁,S₂ and S₃ characterize high,medium,and low demand,respectively.The payoff values are in thousands of dollars. $\text { States of nature }$
$\begin{array} { | l | r | r | r | } \hline \text { Alternatives } & \mathbf { s } _ { \mathbf { 1 } } & \mathbf { s } _ { \mathbf { 2 } } & \mathbf { s } _ { \mathbf { 3 } } \\\hline \text { Strategy 1 } & 110 & 80 & 70 \\\hline \text { Strategy 2 } & 60 & 120 & 50 \\\hline\end{array}$ The management believes that the weather conditions significantly affect the level of demand.48 monthly sales reports are randomly selected.These monthly sales reports showed 15 months with high demand,28 months with medium demand,and 5 months with low demand.12 of the 15 months with high demand had favourable weather conditions.14 of the 28 months with medium demand had favourable weather conditions.Only 1 of the 5 months with low demand had favourable weather conditions.
-If the weather conditions are poor,determine which manufacturing strategy the company should implement.

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Definitions:

Skilled Negotiators

Individuals who excel in navigating negotiation processes, effectively managing communication, relationships, and tactics to achieve desired outcomes.

Settlement

The resolution or agreement reached after a dispute or negotiation.

Concession

An act of yielding or compromising in a disagreement, where one party agrees to make a change or give up something in order to reach an agreement.

Successive Concessions

A negotiation strategy where each party makes gradual concessions to reach an agreement.