The owner of the Gatesville Transport Company must decide among manufacturing 10 new transport trucks manufacturing 20 000 new

Question

The owner of the Gatesville Transport Company must decide among manufacturing 10 new transport trucks manufacturing 20 000 new electric scooters or leasing all their manufacturing equipment to another company The profit that will result from each alternative will be determined by whether material costs remain stable increase moderately or increase significantly The specialists calculated the likelihood for each possible level of material costs In the payoff table below the estimated profit losses are given in thousands Transport Decision Scooters Leasing Probability of State of Nature Transport Decision Scooters a Construct Opportunity Loss Regret Table Leasing Probability of State of Nature Stable EOL Scooters 1810 2200 810 EOL Leasing 0 4 Stable 0 4 c Select the best decision using EOL criterion O Decision Scooters O Decision Leasing O Decision Transport Material Costs Moderate Increase 1020 650 920 b Compute the expected opportunity loss value for each decision EOL Transport d Which of the following formulae is correct 0 5 Material Costs Moderate Increase 0 5 Significant Increase 150 2350 1050 0 1 Significant Increase 0 1

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