Southland Corporation's decision to produce a new line of recreational products has resulted in the need...

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Southland Corporation's decision to produce a new line of recreational products has resulted in the need to choose one of two automated manufacturing systems based on proposals from two vendors, A and B. The economics of this decision depends on the market reaction to the new product line. The possible long-run demand has been defined as low, medium, or high. Based on detailed financial analyses of system costs as a function of volume and sales under each demand scenario, the following payoff table gives the projected profits in millions of dollars. Decision Vendor A Vendor B a. Determine the best decisions using the maximax, maximin, and opportunity loss decision criteria. Using the maximax criterion, choose -Select- Using the maximin criterion, choose -Select- v To minimize the maximum opportunity loss, choose -Select- V b. Assume that the best estimate of the probability of low long-run demand is 0.25, of medium long-run demand is 0.10, and of high long-run demand is 0.65. What is the best decision using the expected value criterion? Round your answers to two decimal places. The expected payoff for Vendor A is $ The expected payoff for Vendor B is $ Choose -Select- million. million. Long-Run Demand Low $160 $270 Medium $210 $210 High $560 $210 Southland Corporation's decision to produce a new line of recreational products has resulted in the need to choose one of two automated manufacturing systems based on proposals from two vendors, A and B. The economics of this decision depends on the market reaction to the new product line. The possible long-run demand has been defined as low, medium, or high. Based on detailed financial analyses of system costs as a function of volume and sales under each demand scenario, the following payoff table gives the projected profits in millions of dollars. Decision Vendor A Vendor B a. Determine the best decisions using the maximax, maximin, and opportunity loss decision criteria. Using the maximax criterion, choose -Select- Using the maximin criterion, choose -Select- v To minimize the maximum opportunity loss, choose -Select- V b. Assume that the best estimate of the probability of low long-run demand is 0.25, of medium long-run demand is 0.10, and of high long-run demand is 0.65. What is the best decision using the expected value criterion? Round your answers to two decimal places. The expected payoff for Vendor A is $ The expected payoff for Vendor B is $ Choose -Select- million. million. Long-Run Demand Low $160 $270 Medium $210 $210 High $560 $210

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a In Maximax method we assume that the best among all the states of nature will happen for each alternativeand choose the alternative which gives the ... View the full answer