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:

Thirst Sensations

The body's signal indicating the need for hydration, triggered by mechanisms within the brain and body.

Blood Osmolarity

A measure of the solute concentration in the blood, reflecting the balance of water and solutes in the body's fluids.

Oral Mucosa

The moist tissue lining of the mouth which includes the gums, inner cheeks, and tongue.

Sodium Bicarbonate

A salt that acts as a buffering agent, helping to maintain pH balance in the blood and other fluids within the body.