The Alternatives 1 and 2 in the Following Payoff Table

question 72

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)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. 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 favorable weather conditions.14 of the 28 months with medium demand had favorable weather conditions.Only 1 of the 5 months with low demand had favorable weather conditions.
If the weather conditions are favorable,determine which manufacturing strategy should the company should implement?

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Definitions:

Ben & Jerry's Sales

Refers to the revenue generated from the sale of Ben & Jerry's ice cream products, a subsidiary of Unilever known for its unique flavors and social activism.

Quantitative Value

A measurable, numerical value associated with data, which can be analyzed statistically for trends, patterns, or to gauge performance.

Marketing Activity

Any action or task carried out by a company to promote and sell its products or services, including advertising, sales, distribution, and market research.

Marketing Metric

A measurement used to evaluate, compare, and track the effectiveness or performance of marketing activities, campaigns, or strategies.