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The Alternatives 1 and 2 in the Following Payoff Table

Question 19

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The alternatives 1 and 2 in the following payoff table represent the two possible manufacturing strategies that the EKA manufacturing company can adopt.The level of demand affects the success of both strategies.The states of nature (SI)represent the levels of demand for the company products.S1,S2 and S3 characterize high,medium and low demand respectively.The payoff values are in thousands of dollars. The alternatives 1 and 2 in the following payoff table represent the two possible manufacturing strategies that the EKA manufacturing company can adopt.The level of demand affects the success of both strategies.The states of nature (S<sub>I</sub>)represent the levels of demand for the company products.S<sub>1</sub>,S<sub>2</sub> and S<sub>3</sub> characterize high,medium and low demand respectively.The payoff values are in thousands of dollars. Determine the best alternative (course of action)for the EKA manufacturing company using the maximin criterion. Determine the best alternative (course of action)for the EKA manufacturing company using the maximin criterion.

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