The Alternatives 1 and 2 in the Following Payoff Table

question 1

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.Based on this information,the prior probabilities have been revised.If the weather conditions are favorable,P(S₁)= .4286,P(S₂)= .5357,and P(S₃)= .0357,and if the weather conditions are poor,P(S₁)= .1364,P(S₂)= .6818,and P(S₃)= .1818.It is also determined that the probability of favorable weather is 0.56 and the probability of poor weather is 0.44.
Carry out a preposterior analysis and using the revised probabilities,determine the expected monetary value when the weather conditions are favorable and determine the expected monetary value when the weather conditions are poor.

---

Definitions:

Proximodistal Development

A pattern of growth and development where skills emerge from the core or central parts of the body outward towards the extremities.

Cephalocaudal Development

A pattern of growth in which development proceeds from the head downwards through the body and limbs.

Fetus's Weight

The mass or weight of a fetus, often monitored to assess growth and development during pregnancy.

Conception And Birth

The process starting from the fertilization of an egg by a sperm (conception) leading to the development of a fetus and ultimately the birth of a child.