Political Systems Inc. (PSI), a newly formed computer service firm specializing ininformation services such as surveys and data analysis for individuals running for political office.
is in the final stage of selecting a computer system for its Midwest branch located in Chicago .While the firm has decided on a computer manufacturer, it iscurrently attempting to determine the size of the computer system that would be the mosteconomical to lease.
Solution by using Payoff Tables :
The first step is to identify the alternatives. For
the final decision will be lease
oneof the three computer systems which differ in size and capacity. The three differentalternatives denoted by d1, d2 and d3.
D1=lease the large computer systemsD2= lease the medium sized computer systemsD3= lease the small computer systemsThus the PSI states of nature denoted S1 and S2, are as follows:S1= high customer acceptance of PSI services.S2= low customer acceptance of PSI services.For example, what profit would PSI experience if the firm has decided to lease the largecomputer system D1 and market acceptance was high S1? What profit would PSIexperience if the firm has decided to lease the large computer system D1 and marketacceptance was low S2? And so on.
Payoff Table for the PSI Computer Leasing Problem
DecisionAlternativesStates of NatureHigh AcceptanceLow AcceptanceS1S2Large