Question
Mathew, project manager for the R&S project, is concerned about the development profit for the HDPE pipe. Although the subcontractor, Greens Pipe, has promised a
Mathew, project manager for the R&S project, is concerned about the development profit for the HDPE pipe. Although the subcontractor, Greens Pipe, has promised a profit of 10 Millions, Mathew knows that the profit will be a function of the number of other projects Greens Pipe is working on. As an incentive to increase the profit, Mathew has three options: S1: Do nothing S2: Promise Greens Pipe a future contract S3: Threaten to never contract with Greens Pipe again. He estimates the impact of these actions on profit would be as follows in Million Dollars: Payoffs: Greens Pipe Workload Strategy Slow Average Busy S1 3 11 17 S2 4 6 8 S3 1 3 21 What strategy should Mathew adopt based upon uncertainty criteria? Use criteria similar to the maximax, maximin, minimax regret, and maximum expected payoff, except note that the criteria must be adapted because here the goal is to maximize the profit.
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