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Mass Production and Continuous Flow Manufacturing
Continuous systems lie at the other extreme, where demand for a single product is sufficiently high to warrant the installation of highly specialised automatic production lines. With their very high rates of output and very low manning levels, unit costs are typically very low. Such systems generally have little flexibility. Where the entities produced or serviced are discrete items (eg car manufacture, processed photographic films) the term mass production is used. The term process industry refers to systems which produce a continuous output (e.g. petroleum products, chemicals, cement).
The following is a payoff table giving profits for various situations. States of Nature Alternatives A B C Alternative 1 100 120 180 Alternative 2 120 140 120 Alternative 3 200 100
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1. Two individuals, Vic and Val, are both working. Vic faces a 10 percent chance of becoming unemployed for three months and losing $12,000 of income. Val's probability of becoming
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