A = (60,000 + 0) = 30,000. 21 / x=3 Therefore, the company should stockpile and associated cost is a 20,000. EXAMPLE 9.4-4 A manufacturer makes a product, of which the principal ingradient is a chemical X. At present, the manufacturer spends * 1,000 per year on supply of X, but there is a possibility that the price may soon increase to four times its present value because of a worldwise shortage of the chemical. There is another chemical Y, which the manufacturer could use in conjunction with a third chemical Z in order to give the same effect as chemical X. Chemicals Y and Z would together cost the manufacturer 3,000 per year and their prices are not likely to increase. What action should the manufacturer take ? Apply the maximin and minimax criteria for decision-making and give two sets of solutions. If the coefficient of optimism is 0.4. find the course of action that