Recommendation that maximizes profits and minimizes loss

Reference no: EM13151162

The probability for a strong market is 0.3; for a fair market is 0.5; and for a poor market is 0.2. You are responsible for advising the president of Modern Electronics on the type facility that should be built or to not build a facility at all. The table shows the estimated profits under each market and for each size facility.

Estimated Profits

Strong Market Fair Market Poor Market
Build a large facility 550,000 110,000 -310,000
Build a medium-size facility 300,000 129,000 -100,000
Build a small facility 200,000 100,000 -32,000
Do not build a facility 0 0 0

Using the information in the table above develop a recommendation for your president. Be sure to explain why you are making the recommendation and you must include a recommendation that maximizes profits and a recommendation that minimizes loss.

Reference no: EM13151162

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