Question 4 Foxcomp, an electronics and computer manufacturer with a global supply chain, wants to add a...

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Question

General Management

Question 4
Foxcomp, an electronics and computer manufacturer with a globalsupply chain, wants to add a new supplier for some of its componentparts, and the suppliers it's considering are in Taiwan, India,Thailand, the Philippines. As part of its risk management program,Foxcomp wants to assess the possible impact of a supplier shutdownin the event of a natural disaster, such a flood, fire, tsunami, oran earthquake. The following payoff table summarizes the losses (inmillions of dollars) for an extended supplier shutdown, givendifferent levels of event severity and recovery in eachcountry.
Event Severity
Low
Moderate
Normal
Taiwan
$15
$19
$23
India
7
10
20
Thailand
12
15
19
Philippines
6
9
25
probability
0.42
0.35
0.23
Determine the best decision using each of the followingcriteria.
Minimim
Minimax
Minimax Regret (You need to create an opportunity losstable)
Determine the best decision using expected value.
Determine the expected value of perfect information(EVPI).

Answer & Explanation Solved by verified expert

3.8 Ratings (629 Votes)

We tabulate the data and fid values for Minimin and Minimax asshown belowThe above table in the form of formulas is shown below forbetter understanding and referenceHence the best decision as perMinimin See Answer

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Question 4 Foxcomp, an electronics and computer manufacturer with a global supply chain, wants to add a...

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General Management

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	Event Severity
	Low	Moderate	Normal
Taiwan	$15	$19	$23
India	7	10	20
Thailand	12	15	19
Philippines	6	9	25
probability	0.42	0.35	0.23