Question

Telecomp, a computer manufacturer with a global supply chain, is adding a new supplier for some of its component parts, and the suppliers it’s considering are in China, India, Thailand and the Philippines. As part of its risk management program Telecomp wants to assess the possible impact of a supplier shutdown in the event of a natural disaster, such as a flood, tire, or an earthquake. The following payoff table summarizes Telecomp’s losses (in millions of dollars) for supplier shutdowns given different levels of event severity.


Determine the best decision using each of the following criteria.
a. Minirnin
b. Minimax
c. Equal likelihood
d. Minimaxregret


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  • CreatedApril 10, 2014
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