ASHFORD BUS 644 Week 2 DQ 1 Plant Capacity (Old)

ASHFORD BUS 644 Week 2 DQ 1 Plant Capacity (Old)

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Attachments: ASHFORD BUS 644 OLD Week 2 DQ 1 Plant Capacity.docx [ Preview Here ]

Plant Capacity. A small building contractor has recently experienced two successive years in which work opportunities exceeded the firm’s capacity. The contractor must now make a decision on capacity for next year. Estimated profits under each of the two possible states of nature are as shown in the table below. Which alternative should be selected if the decision criteria is:

a. Maximax

b. Maximin

a. Laplace

b. Minimax regret

Indicate and incorporate recommendations to management in 200 wordsYou must respond to at least two of your classmates’ postings.

Next Year's Demand Alternative

Low

High

Do nothing

$50*

$60*

Expand

20

80

Subcontract

40

70

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