Telecomp is a U.S.-based manufacturer of cellular tele-phones. It is planning to build a new manufacturing and distribution facility in either South Korea, China, Taiwan,Poland, or Mexico. The cost of the facility will differbetween countries and will even vary within countriesdepending on the economic and political climate, includingmonetary exchange rates. The company has estimated the facility cost (in $ millions) in each country under three dif-ferent future economic/political climates as follows. Determine the best decision using the following decision criteria. (Note that since the payoff is cost, the maximax cri-teria becomes minimin and maximin becomes minimax.) a. Miniminb. Minimaxc. Hurwicz ( 0.40)d. Equal likelihood Economic/Political ClimateCountry Decline Same ImproveSouth Korea 21.7 19.1 15.2China 19.0 18.5 17.6Taiwan 19.2 17.1 14.9Poland 22.5 16.8 13.8Mexico 25.0 21.2 12.5
Telecomp is a U.S.-based manufacturer of cellular tele-
phones. It is planning to build a new manufacturing and
distribution facility in either South Korea, China, Taiwan,
Poland, or Mexico. The cost of the facility will differ
between countries and will even vary within countries
depending on the economic and political climate, including
monetary exchange rates. The company has estimated the
facility cost (in $ millions) in each country under three dif-
ferent future economic/political climates as follows.
Determine the best decision using the following decision
criteria. (Note that since the payoff is cost, the maximax cri-
teria becomes minimin and maximin becomes minimax.)
a. Minimin
b. Minimax
c. Hurwicz ( 0.40)
d. Equal likelihood
Economic/Political Climate
Country Decline Same Improve
South Korea 21.7 19.1 15.2
China 19.0 18.5 17.6
Taiwan 19.2 17.1 14.9
Poland 22.5 16.8 13.8
Mexico 25.0 21.2 12.5
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