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Question

Trey Leeman, Operations Manager at National Consumers, Inc. (NCI), is evaluating alternatives for increasing capacity at NCI's Fountain Hill plant. He has identified four alternatives, and has constructed the following payoff table which shows payoffs (in $1,000,000's) for the three possible levels of market demand.

 Market Demands
Alternative Low Medium High
Lease New Equipment -0.5 2 4
Purchase New Equipment -3 0.5 6
Add Third Shift 0.5 0.75 1
Do Nothing 0 0 0

If Trey uses the maximax criterion, the appropriate alternative would be: _____________.
a) Lease New Equipment
b) Purchase New Equipment
c) Add Third Shift
d) Do Nothing
e) Do everything

Answer

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