The Operations Manager for a Local Bus Company Wants to Decide

question 24

Multiple Choice

The operations manager for a local bus company wants to decide whether he should purchase a small, medium, or large new bus for his company. He estimates that the annual profits (in $000) will vary depending upon whether passenger demand is low, moderate, or high, as follows.

-If he uses Bayes' decision rule,which size bus will he decide to purchase?

• A)Small
• B)Medium
• C)Large
• D)Either small or medium
• E)Either medium or large

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Definitions:

Ambiguity

The quality of being open to more than one interpretation, explanation, or meaning, often leading to confusion or misunderstanding.

Network Structures

Organizational designs that focus on decentralized connections between individuals or units, allowing for flexible coordination and exchange of information.

Mechanistic Organizational Structure

An organization design that is hierarchical and bureaucratic, characterized by clear, rigid departmentalization, centralized decision making, and a strict chain of command.

Divisionalized Structure

An organizational form where operations are segregated based on products, markets, or geography, allowing for a degree of autonomy and specialization.