A small parts manufacturer has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand. The following payoff table describes the company's decision situation: The value of the Hurwicz decision criterion for subcontract production when the coefficient of optimism is 0.30 is
A) $92,500.
B) $182,500.
C) $250,000.
D) $275,000.

Question

A small parts manufacturer has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand. The following payoff table describes the company's decision situation:  The value of the Hurwicz decision criterion for subcontract production when the coefficient of optimism is 0.30 is
A) $92,500. 
B) $182,500. 
C) $250,000. 
D) $275,000.

Quizplus · Accepted Answer

The Answer of A small parts manufacturer has just engineered a new product for the automotive industry. In order to produce the part the company can expand existing facilities, acquire a competitor, or subcontract production. The company believes the product will either experience high market demand or low market demand. The following payoff table describes the company's decision situation:  The value of the Hurwicz decision criterion for subcontract production when the coefficient of optimism is 0.30 is
A) $92,500. 
B) $182,500. 
C) $250,000. 
D) $275,000.

A Small Parts Manufacturer Has Just Engineered a New Product