Question: Given the payoff table, find the alternative that would be chosen using the maximax criterion. The example involves a capacity-planning problem in which a company

Given the payoff table, find the alternative that would be chosen using the maximax criterion.

The example involves a capacity-planning problem in which a company must choose to build a small, medium, or large production facility. The payoff obtained will depend on whether future demand is low, moderate, or high, and the payoffs are as given in the first table.

Possible Future Demand Alternatives Small facility Moderate High $10 Low $10* $10 12 Medium facility 12 2 Large facility

Possible Future Demand Alternatives Small facility Moderate High $10 Low $10* $10 12 Medium facility 12 2 Large facility -4 16

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