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# Determine the approximate decision under uncertainty

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Given the following conditional value table:

Very Favorable Average Unfavorable
Alternatives Market Market Market

Build new plant \$350,000 \$240,000 -\$300,000
Subcontract \$180,000 \$ 90,000 -\$ 20,000
Overtime \$110,000 \$ 60,000 -\$ 10,000
Do nothing \$ 0 \$ 0 \$ 0

Determine the approximate decision under uncertainty using:

a) Maximax
b) Maximin
c) Equally likely

##### Solution Summary

Build a new plant: Determine the approximate decision under uncertainty using a) maxi-max, b) maxi-min, c) equally likely

##### Solution Preview

Maximax:

Alternative 1: 350,000
Alternative 2: 180,000
Alternative 3: 110,000
Alternative 4: 0

Applying the maximax criteria, the decision maker will select Alternative 1, ie, Building new plant which ...

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###### Education
• BCom, SGTB Khalsa College, University of Delhi
• MBA, Rochester Institute of Technology
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