The manager of Regret Manufacturing is considering three options on the size of

Question

The manager of Regret Manufacturing is considering three options on the size of the factory: Expand, No change, or Downsize. Monthly profits based on two possible scenarios (High and Low) of demand are estimated in $1,000 below.

The manager of Regret Manufacturing is considering three options on the size of the factory: Expand, No change, or Downsize. Monthly profits based on two possible scenarios (High and Low) of demand are estimated in $1,000 below Decision Expand o change High Demand 75 25 20 25 50 a. Downsize and then expand b. No change c. Downsize d. Expand e. Expand and then downsize

Explanation / Answer

If you consider sum of profits in high and low demand then we get

100+-20=80

75+25=100

25+50=75

overall more profit is in case of No change

so correct choice will be b.

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