Question
A manufacturer is trying to decide whether to build Building A or Building B. The profit per unit is $5.
Building A gets an annual cost of $100,000 with a production capacity of 25,000 units each year.
Building B gets an annual cost of $200,000 with a production capacity of 50,000 units each year.
There are 4 states of nature (demand) -- 5k, 10k, 25k, & 50k units per year.
How is the payoff table constructed?
Building A gets an annual cost of $100,000 with a production capacity of 25,000 units each year.
Building B gets an annual cost of $200,000 with a production capacity of 50,000 units each year.
There are 4 states of nature (demand) -- 5k, 10k, 25k, & 50k units per year.
How is the payoff table constructed?