Question: Microcomp is a U.S.-based manufacturer of personal computers. It is planning to build a new manufacturing and distribution facility in either South Korea, China, Taiwan,
Microcomp is a U.S.-based manufacturer of personal computers. It is planning to build a new manufacturing and distribution facility in either South Korea, China, Taiwan, the Philippines, or Mexico. It will take approximately 5 years to build the necessary infrastructure (roads, etc.), construct the new facility, and put it into operation. The eventual cost of the facility will differ between countries and will even vary within countries depending on the financial, labor, and political climate, including monetary exchange rates. The company has estimated the facility cost (in $1,000,000s) in each country under three different future economic and political climates, as follows:
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Determine the best decision, using the following decision criteria.
a. Minimin
b. Minimax
c. Hurwicz (α = .4)
d. Equallikelihood
Economic/Political Climate Country Decline Same Improve South Korea China Taiwan Philippines Mexico 21.7 19.0 19.2 22.5 25.0 19.1 18.5 17.1 16.8 21.2 15.2 17.6 14.9 13.8 12.5
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a Minimin South Korea 152 China 176 Taiwan 149 Philippines ... View full answer
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