Table A.2 Use the following to answer the questions below. A...

Table A.2 Use the following to answer the questions below. A company that is introducing a new product has to choose between four different manufacturing methods, referred to as methods A, B, C and D. Depending on the demand for the product, they forecast different levels of expenses for the year (values are in thousands). The company has identified three possible states of nature for economic growth, and named them High, Medium, and Low. High Medium Low Method A $450 $670 $780 Method B $950 $320 $200 Method C $375 $575 $775 Method D $800 $400 $300 Using the information in Table A.2, which alternative is best in accordance with a pessimistic outlook? Select one: A. A B. B C. C D. D

Transcript

00:01 Once again, welcome to a new problem.

00:05 So you have a company.

00:08 You have a company and the company is introducing.

00:13 So they're introducing new products.

00:17 They're introducing new products to the market.

00:24 So they're introducing new products to the market.

00:27 It.

00:30 And the four different manufacturing methods, so there are four different manufacturing methods that they have to deal with.

00:47 And these methods are a, b, c, and d.

00:53 So these are the different methods that they have to deal with.

01:00 Depending on the demand for the product, so depending on the demand for the product, so depending on the demand for the product, there is forecasting for different expenses.

01:22 These forecasting for different expenses and these are values in thousands so these are values in thousands the company has identified has identified three possible three possible states of nature for economic growth, so three possible states of nature for economic growth.

02:01 And we have these different methods.

02:02 We have method a, we have method b, we have method c, and we have method d.

02:17 So in this sense we have a high method, and then we have a method.

02:26 Median median and then we have the low method so we have four fifty dollars now we have nine fifty dollars we have three seventy five dollars we have eight hundred six seventy of course three twenty five five of course four hundred we we have 780, we have 200, we have 775, we have 300, we have 775, we have 300.

03:16 The question is determine, determine the best alternative, so we want to determine the best alternative, so we want to determine the best alternative in accordance, in accordance with decision criteria for laplace.

03:46 So we want to determine the best decision criteria for laplace.

03:51 So in this sense, we're saying taking advantage of taking advantage of of equally like that...

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