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

question 25

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 favourable,determine which manufacturing strategy the company should implement?

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Definitions:

Modeling

The process of learning behavior by observing and imitating others.

Fixed Ratio

A schedule of reinforcement where a response is reinforced only after a specified number of responses, often used in behavior analysis.

Variable Interval

A schedule of reinforcement where a response is rewarded after an unpredictable amount of time has passed, leading to a steady but slow rate of response.

Fixed Interval

A schedule in operant conditioning where the first response is rewarded only after a specified amount of time has elapsed.