The Alternatives 1 and 2 in the Following Payoff Table

question 56

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 poor,determine which manufacturing strategy the company should implement.

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Definitions:

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A concept in sociology referring to suicides that occur due to a breakdown in social bonds or norms, often in times of social or economic upheaval.

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The principle that an individual's rights and interests take priority over those of the collective or group.

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