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

question 58

Essay

An operations manager's staff has compiled the information below for four manufacturing alternatives (E,F,G,and H)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.Forecasts indicate that there is a 0.1 probability of acceptance level 1,0.2 chance of acceptance level 2,0.4 chance of acceptance level 3,and 0.3 change of acceptance level 4.
Using the criterion of expected monetary value,which production alternative should be chosen?

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Definitions:

Virus-infected Cells

Cells that have been invaded by viruses, which hijack the cells' machinery to replicate and produce more viruses.

Active Artificial Immunity

Immunity acquired through the introduction of a vaccine containing a harmless form of a pathogen, prompting an immune response without causing the disease.

Immunization

Process by which a subject is rendered immune by deliberately introducing an antigen or antibody into the subject.

Hepatitis B

A serious liver infection caused by the hepatitis B virus that can become chronic and lead to liver cancer or cirrhosis.