The DoorCo Corporation is a leading manufacturer of garage doors. DoorCo is considering establishing a wood door operations in one of three states, Indiana, Wisconsin, and Illinois. After they make the decision, all wood doors will be manufactured in the selected location and shipped to distribution centers or major customers. Key considerations in this decision are costs (such as transportation, labor, and production) at the three locations.
Complicating matters is the fact that marketing is predicting a decline in the demand for wood doors. The company developed two scenarios: a. Demand falls slightly. b. Demand falls sharply. The following table shows the total costs (payoffs are costs) under each decision and scenario.
Determine the best choice under the Aggressive strategy.
Enter your answer as:
- 1, if the best choice is Indiana
- 2, if the best choice is Wisconsin
- 3, if the best choice is Illinois
Attention: Payoff values in various questions might be different.
Demand falls slightly | Demand falls sharply | |
Indiana | 16 | 15 |
Wisconsin | 12 | 24 |
Illinois | 17 | 20 |
The DoorCo Corporation is a leading manufacturer of garage doors. DoorCo is considering establishing a wood door operations in one of three states, Indiana, Wisconsin, and Illinois. After they make the decision, all wood doors will be manufactured in the selected location and shipped to distribution centers or major customers. Key considerations in this decision are costs (such as transportation, labor, and production) at the three locations.
Complicating matters is the fact that marketing is predicting a decline in the demand for wood doors. The company developed two scenarios: a. Demand falls slightly. b. Demand falls sharply. The following table shows the total costs (payoffs are costs) under each decision and scenario.
How much is the opportunity loss (regret), if the company chooses Indiana, and demand falls slightly.
Attention: Payoff values in various questions might be different.
Demand falls slightly | Demand falls sharply | |
Indiana | 17 | 23 |
Wisconsin | 12 | 4 |
Illinois | 20 | 28 |