The Proprietor of Belvedere's Is Faced with the Problem of Deciding

question 92

Multiple Choice

The proprietor of Belvedere's is faced with the problem of deciding whether to expand his restaurant facilities now or to wait until some future date to do so. If he expands the facilities now and the economy experiences a period of growth during the coming year, he will make a net profit of $369,000; if he expands now and a period of zero growth follows, then he will make a net profit of $90,000; and if he expands now and an economic recession follows, he will suffer a net loss of $100,000. If he does not expand the restaurant now and the economy experiences a period of growth during the coming year, he will make a net profit of $257,000; if he does not expand now and a period of zero growth follows, he will make a net profit of $190,000. Finally, if he does not expand now and an economic recession follows, he will make a net profit of $160,000. ​
Represent this information in the form of a payoff matrix.
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Hint: The row player is the proprietor of restaurant and the column player is the economy.
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Definitions:

Human Resource Productivity

The measure of how effectively the human resource department and the overall workforce generate output or achieve goals relative to input.

Labour Expenses

Costs associated with compensating employees, including wages, salaries, benefits, and taxes.

Rightsizing

Adjusting the number of employees to fit the current needs of the organization, which may involve layoffs or hiring.

Layoffs

The temporary or permanent dismissal of employees from their jobs due to economic downturns, business restructurings, or other financial reasons.