If he uses the maximax criterion, which alternative will he decide to select?
A)do nothing
B)expand
C)build new
D)either do nothing or expand
E)either expand or build new

Question

Quizplus · Accepted Answer

The maximax criterion involves selecting the alternative with the maximum possible payoff. In this case, building new has the potential for the highest payoff, as it could lead to increased profits and growth for the business. While expanding also has the potential for a high payoff, it may not have as much potential as building new. Doing nothing or choosing between do nothing and expand would not provide a payoff increase for the business, and choosing between expand and build new could potentially leave profits on the table. Therefore, the best choice according to the maximax criterion is to build new.

If He Uses the Maximax Criterion, Which Alternative Will He