A Firm Is Weighing Three Capacity Alternatives: Small,medium,and Large Job

question 3

Essay

A firm is weighing three capacity alternatives: small,medium,and large job shop.Whatever capacity choice is made,the market for the firm's product can be "moderate" or "strong." The probability of moderate acceptance is estimated to be 40 percent;strong acceptance has a probability of 60 percent.The payoffs are as follows.Small job shop,moderate market = $24,000;Small job shop,strong market = $54,000.Medium job shop,moderate market = $20,000;medium job shop,strong market = $64,000.Large job shop,moderate market = -$2,000;large job shop,strong market = $96,000.Which capacity choice should the firm make?

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Definitions:

Stress

A psychological and physical response to a demand or threat, which can affect mental and physical health.

Adrenaline Loss

A condition or state characterized by a decrease in adrenaline, potentially affecting energy levels, response to stress, or physical readiness.

Osteoporosis

A medical condition characterized by the weakening of bones, making them fragile and more likely to break.

Weight-Bearing Exercise

Physical activities that involve carrying one’s own weight or working against resistance, which can help strengthen bones and muscles.