Approaches for meeting an expected increase in demand


Assignment:

Jerry Bildery’s factory is considering three approaches for meeting an expected increase in demand. These three approaches are increasing capacity, using overtime, and buying more equipment. Demand will increase either slightly (S), moderately (M), or greatly (G). The profits for each approach under each possible scenario are as follows:

 
Increasing capacity   $5700.000    $5700.000    $700,000
Using overtone         $5500.000    $600,000      $11,000,000
Buymg equipment     $5600.000    $800,000      $800,000
          
Since the goal is to maximize, and Jerry is risk-neutral, he decides to use the equally likely decision criterion to make the decision as to which approach to use. According to this criterion, which approach should be used?

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Supply Chain Management: Approaches for meeting an expected increase in demand
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