Explain decision making under uncertainty, Operation Management

Assignment Help:

Even though independent gasoline stations have been having a difficult time, Susan Helms has been thinking about starting her own independent gasoline station. Susan's problem is to decide how large her station should be. The annual returns will depend on both the size of her station and a number of marketing factors related to the oil industry and demand for gasoline. After a careful analysis, Susan developed the following table:

STATE OF NATURE

Size of First Station GOOD MARKET FAIR MARKET POOR MARKET

Small 40,000 18,000 -8,000

Medium 90,000 27,000 -22,000

Large 105,000 27,500 -36,000

Very Large 320,000 26,000 -180,000

For example, if Susan constructs a small station and the market is good, she will realize a profit of 40,000.

1) Using the decision making under uncertainty with the criterion of Maximax

The appropriate decision will be ___________ (Very large, large, medium or small)

The value of the return under this decision is $_____________

2) Using the decision making under uncertainty with the criterion of Maximin

The appropriate decision will be ___________ (Very large, large, medium or small)

The value of the return under this decision is $_____________

3) Using the decision making under uncertainty with the criterion of Equally Likely

The appropriate decision will be ___________ (Very large, large, medium or small)

The value of the return under this decision is $_____________


Related Discussions:- Explain decision making under uncertainty

Explain why are company/organizational politics important, Why are company/...

Why are company/organizational politics important to a manager?

Generate a table that includes all of the key elements, Create a table that...

Create a table that includes all of the key elements that you think an organization must focus on to promote change

Explain best leverage the federal registers website, Analyze the ways in wh...

Analyze the ways in which managers could use the Federal Register to determine the single most significant challenge associated with its use, and how managers could address that ch

Describe the history of welfare reform, Discuss the history of welfare refo...

Discuss the history of welfare reform. Discuss some of the historical aspects and your opinion about how these changes were implemented and whether or not the changes were effectiv

Explain description of the concepts of offer, The paper must be four to fiv...

The paper must be four to five pages excluding title page and reference pages, following APA format. Address all of the following parts of this assignment: Suppose that the F

Explain controlling stock levels of all the products at tep, Using Pareto a...

Using Pareto analysis, categorize the products into Classes A, B, C, based on usage value. Would this approach be useful for categorizing and controlling stock levels of all the pr

Explain need step by step solutions to case study, Need step by step soluti...

Need step by step solutions to case study 2-1 (auto-assembly)

Explain agreement by union and management, How does the threat of a strike ...

How does the threat of a strike (or actual strike) affect the negotiating process and its tendency to bring about conditions necessary for agreement by union and management?

Explain change forces are adapting and sustaining, Which of the following b...

Which of the following best shows forces for change vs. forces for stability? Change forces are: adapting, sustaining, and predicting; whereas stability forces are: bureaucracy, tr

Calculate the economic order quantity, The Managing Director of Beauty Soap...

The Managing Director of Beauty Soaps Ltd just visited a soap manufacturing firm in Malaysia and he was immensely impressed by its raw materials stock management System. He wanted

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd