4. A plant manager considers the operational cost per hour of five machine alternatives. The cost per hour is sensitive to three potential weather conditions: cold, mild, and warm. The following table represents the operations cost per hour for each alternative- state of nature combination: Alternatives Cold cost/day Mild cost/day Warm cost/day Machine 1 $45 $35 $40 Machine 2 $40 Machine 3 $35 Machine 4 $55 Machine 5 $40 $37 $30 $20 $35 Using the optimistic criterion, which alternative is best? $42 $48 $44 $40
4. A plant manager considers the operational cost per hour of five machine alternatives. The cost per hour is sensitive to three potential weather conditions: cold, mild, and warm. The following table represents the operations cost per hour for each alternative- state of nature combination: Alternatives Cold cost/day Mild cost/day Warm cost/day Machine 1 $45 $35 $40 Machine 2 $40 Machine 3 $35 Machine 4 $55 Machine 5 $40 $37 $30 $20 $35 Using the optimistic criterion, which alternative is best? $42 $48 $44 $40
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 4CE
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![4. A plant manager considers the operational cost per hour of five machine alternatives.
The cost per hour is sensitive to three potential weather conditions: cold, mild, and
warm. The following table represents the operations cost per hour for each alternative-
state of nature combination:
Alternatives Cold cost/day Mild cost/day Warm cost/day
Machine 1
$45
$35
$40
Machine 2
$40
$37
$42
Machine 3
$35
$30
$48
Machine 4
Machine 5
$55
$40
$20
$35
Using the optimistic criterion, which alternative is best?
$44
$40](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd3485286-e420-456a-8a41-5bc62e18ff5f%2Ffc829df0-58a8-4fa9-ad67-821946953bd8%2Fvf6qsd_processed.jpeg&w=3840&q=75)
Transcribed Image Text:4. A plant manager considers the operational cost per hour of five machine alternatives.
The cost per hour is sensitive to three potential weather conditions: cold, mild, and
warm. The following table represents the operations cost per hour for each alternative-
state of nature combination:
Alternatives Cold cost/day Mild cost/day Warm cost/day
Machine 1
$45
$35
$40
Machine 2
$40
$37
$42
Machine 3
$35
$30
$48
Machine 4
Machine 5
$55
$40
$20
$35
Using the optimistic criterion, which alternative is best?
$44
$40
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