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Assignment 2 North Lakes Academy 56 MANAGEMENT ASSIGNMENT (ALL ANSWERS ARE CORRECT)

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Name: Student’s ID: Assignment 2 • A company is choosing a motorised mechanism for a new toy, a dancing ballerina (Tippi-Toes) that is currently under development. Demand is uncertain, but the ... company is confident that demand will be: Light (25,000 units), Moderate (100,000 units) or Heavy (150,000) units. • The payoff table for each mechanism (in $) is given below. Action: Choice of Mechanism Pneumatic Weights and Pulley Spring Gears and levels Event -300,000 -125,000 - 10 000 25,000 Light 300,000 400,000 440,000 400,000 Moderate 700.000 750,000 740,000 650,000 Heavy Questions: 1. Apply Maximax, Maximin, Minimax Regret, and EMV rules (assuming that the probability of Light demand is 0.1, Moderate demand is 0.7, and Heavy demand is 0.2) to decide what mechanism should the company choose? The maximin rule selects the maximum of the minimum outcomes for each level. Light: - 300,000 Moderate: 300,000 Heavy: 650,000 Maximax: Light: 25,000 Moderate: 440,000 Heavy: 750,000 Minimax Regret: Action: Choice of Mechanism Pneumatic Weights and Pulley Spring Gears and levels Event 0 -425,000 -310,000 -275,000 Light -140,000 -40,000 0 -40,000 Moderate -50.000 0 -10,000 -100,000 Heavy Regret table Event Gears and Levers Spring Weights and Pulleys Pneumatic Light 0 35,000 150,000 325,000 Moderate 40,000 0 40,000 140,000 Heavy 100,000 10,000 0 50,000 Maximu m 100,000 35,000 150,000 325,000 EMV rules: [Show More]

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