A shortage of capacity (or inventory) occurs when

A) there are excessive cancellations.
B) there are few cancellations.
C) an expensive backup needs to be arranged.
D) B and C only

Answer: B

Business

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Refer to the payoff table. Using the maximin criterion, what would be the highest expected payoff?

A) $145 B) $125 C) $85 D) $75 E) $60

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In decision making under ________, there are several possible outcomes for each alternative, and the decision maker does not know the probabilities of the various outcomes

A) risk B) utility C) certainty D) probability E) uncertainty

Business