An Operations Manager's Staff Has Compiled the Information Below for Four

question 96

Essay

An operations manager's staff has compiled the information below for four manufacturing alternatives (A,B,C,and
D)that vary by production technology and the capacity of the machinery.All choices enable the same level of total production and have the same lifetime.The four states of nature represent four levels of consumer acceptance of the firm's products.Values in the table are net present value of future profits in millions of dollars.

a.Assuming a maximax strategy,which alternative would be chosen?
b.If maximin were used,which would be chosen?
c.If the states of nature were equally likely,which alternative should be chosen?

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Definitions:

Consumption

The process of buying or using goods and services by consumers.

Economic Development

The process by which a nation improves the economic, political, and social well-being of its people, often characterized by industrialization, increase in GDP, and improvement in quality of life.

Government Efforts

Initiatives or actions taken by a government to address societal issues, regulations, or economic policies.

Private Efforts

Actions undertaken by individuals or private organizations rather than by the government or public entities to achieve a particular goal.