Alternatives 1 and 2 in the Following Payoff Table Represent

question 48

Multiple Choice

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,with probabilities of .3,.6,and .1,respectively.The payoff values are in thousands of dollars. Find the expected monetary value for each of the alternatives and determine the best alternative (course of action) for the EKA manufacturing company using the expected monetary value criterion.

• A) EMV₁ = $98,000,EMV₂ = $95,000,choose strategy 1
• B) EMV₁ = $88,000,EMV₂ = $95,000,choose strategy 2
• C) EMV₁ = $88,000,EMV₂ = $85,000,choose strategy 1
• D) EMV₁ = $66,667,EMV₂ = $76,667,choose strategy 2
• E) EMV₁ = $120,000,EMV₂ = $110,000,choose strategy 1

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Definitions:

Second-chance Meetings

Meetings designed to give individuals or teams an opportunity to revisit decisions or actions and possibly rectify past mistakes or oversights.

Wheel Communication Networks

A communication model where all messages pass through a central hub or person before being distributed to others.

Chain Communication Network

A communication system within an organization where messages pass from one member to another in a sequential manner.

Centralized Communication Networks

Link group members through a central control point.