Question
Cheryl is considering purchasing additional sewing machines to accommodate the increasing demand for her cosplay costumes. Her alternatives are to buy 1 machine, 2 machines,
Cheryl is considering purchasing additional sewing machines to accommodate the increasing demand for her cosplay costumes. Her alternatives are to buy 1 machine, 2 machines, or 3 machines. The profits realized under each alternative are a function of whether her proposal to bid for clothing the official Bandai team is accepted or not. The payoff table below illustrates the profits realized (in $000's) based on the different scenarios Cheryl faces. The probability that her proposal will be accepted is 65%.
Alternative | Proposal Accepted | Proposal Rejected |
Purchase 1 sewing machine | $10 | $5 |
Purchase 2 sewing machines | $30 | $4 |
Purchase 3 sewing machines | $40 | $2 |
What alternative should Cherly select based on a criterion of realism with = 0.8? Out of these choices.
- Purchase 1 machine
- Purchase 2 machines
- Purchase 3 machines
- Do not buy anything.
Cannot be determined.
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