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

question 68

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 dollar

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:

Wilcoxon Rank Sum Test

A nonparametric test that determines whether two independent samples come from the same distribution by comparing their ranks.

Population Location

Refers to the geographical distribution of members of a population across different areas.

Response Times

The duration between the initiation of a query, command, or stimulus and the system's or person's reaction or reply.

Nonparametric Procedure

A nonparametric procedure refers to a type of statistical analysis that does not rely on data belonging to any particular distribution, suitable for ordinal data or when the data's distribution is unknown.