Use the following data to answer questions 77-87.
-Refer to the data on Expected Demand for Acme Widgets.Based on the Hurwicz criterion,what is the payoff for the "outsource" option if you used the coefficient of realism of 0.6?
A)$45.20 million
B)$16.44 million
C)$57.00 million
D)$33.42 million

Question

Use the following data to answer questions 77-87.  
-Refer to the data on Expected Demand for Acme Widgets.Based on the Hurwicz criterion,what is the payoff for the "outsource" option if you used the coefficient of realism of 0.6?
A)$45.20 million 
B)$16.44 million 
C)$57.00 million 
D)$33.42 million

Quizplus · Accepted Answer

The Hurwicz criterion is a decision-making rule that combines the most optimistic (maximum payoff) and the most pessimistic (minimum payoff) outcomes for each decision, weighted by a coefficient of realism (α). For the "outsource" option, if the coefficient of realism is 0.6, this means 60% weight is given to the most optimistic outcome and 40% to the most pessimistic. Without the specific optimistic and pessimistic values provided in the question, we can't calculate the exact payoff. However, based on the given options and the context of the question, we select the answer that matches the format of a possible outcome. Since the correct calculation cannot be determined without additional data, the selection of $45.20 million as the correct answer is based on the assumption that it represents a plausible outcome when applying the Hurwicz criterion with a coefficient of realism of 0.6 to the provided data.

Use the Following Data to Answer Questions 77-87