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:

Strategic Choice

The decision-making process in which individuals or organizations select among various options to achieve specific objectives.

Declarative Memory

A type of long-term memory that involves the recall of specific facts and events that can be verbally conveyed.

Procedural Memory

Procedural memory is a type of long-term memory concerned with the acquisition of motor skills and habits, enabling individuals to perform tasks without conscious thought.

Factual Information

Data, details, or knowledge based on real, observable events or items, not influenced by emotions or personal opinions.