A tire manufacturer needs to choose the production level for the coming month (high vs. low). The level of production largely depends on the level of demand. For this situation, the level of demand (high, medium, low) is the state of nature.

Question

Quizplus · Accepted Answer

States of nature is the set of potential future conditions that will have an effect on the results of a decision. The level of demand will have an impact on level of production. Thus, the level of demand is the state of nature.

A Tire Manufacturer Needs to Choose the Production Level for the Coming