Find the best alternative (and the resulting payoff) in the given payoff table if it is known with certainty that demand will be
a. Low.

b Medium.

c High.

The example involves a capacity-planning problem in which a company must choose to build a small, medium, or large production facility. The payoff obtained will depend on whether future demand is low, moderate, or high, and the payoffs are as given in the first table.

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Possible Future Demand Alternatives Small facility Moderate High $10 Low $10* $10 12 Medium facility 12 2 Large facility -4 16